Dynamic Impact of Income Inequality on Carbon Dioxide Emissions in Africa: New Evidence from Heterogeneous Panel Data Analysis

Hamisu Ali (), Sallahuddin Hassan, Yusuf Ibrahim Kofarmata and Yusuf Ibrahim Kofarmata
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Sallahuddin Hassan: School of Economics, Finance and Banking, Universiti Utara, Malaysia, Kedah, Malaysia,
Yusuf Ibrahim Kofarmata: School of Economics, Finance and Banking, Universiti Utara, Malaysia, Kedah, Malaysia,
Yusuf Ibrahim Kofarmata: School of Economics, Finance and Banking, Universiti Utara, Malaysia, Kedah, Malaysia.

International Journal of Energy Economics and Policy, 2016, vol. 6, issue 4, 760-766

Abstract: We extended the study of Zhang and Zhao (2014) for China, which examines the regional impact of carbon dioxide emissions on income inequality. The present article examine the dynamic impact of income inequality on carbon dioxide emissions in Africa. We applied heterogeneous panel autoregressive distributed lag techniques of mean group (MG) and pooled MG suggested by Pesaran et al. (1999), during 1984-2001. The main empirical result reveals that; the relationship between income inequality and carbon dioxide emissions is negative and statistically significant. This means that; widening income inequality could lead to the reduction of carbon dioxide emissions in the sampled countries. Moreover, the variables of trade openness, per-capita gross domestic product (GDP), and urbanization are positive and statistically significant; this means that increase in any of these variables could lead to overall increase in the level of carbon dioxide emissions. Therefore, in providing policies that will be used to improve environmental quality in Africa, income inequality should not be considered because it is reducing the level of environmental degradation through reduction of carbon dioxide emissions. Hence, policy makers should not consider income inequality when formulating environmental policies among the selected sample countries.

Keywords: Income Inequality; CO2 Emissions; Mean Group; Pooled Mean Group; Panel Autoregressive Distributed Lag; Africa (search for similar items in EconPapers)
JEL-codes: F64 Q54 Q58 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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