Income Inequality and Environmental Degradation in Middle-Income Countries: A Test of Two Competing Hypotheses

Ibrahim Ali

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2023, vol. 166, issue 2, No 3, 299-321

Abstract: Abstract The relationship between income inequality and environmental degradation is still a global concern of empirical research. In this study, two main hypotheses concerning this relationship are tested using data from a panel of 42 middle-income countries (MICs) over the period 1990–2016. The results adopted from two different methodologies based on panel quantile regression techniques emphasize a trade-off relationship between inequality and environmental degradation, which supports the marginal propensity to emit (MPE) hypothesis rather than the political economy (PE) hypothesis in understanding the impact of inequality on environmental degradation in MICs. This finding leaves policymakers in MICs facing a difficult choice: either reducing inequality or improving the environment because the two goals are not achieved simultaneously according to the results. The results also confirm the existence of the environmental Kuznets curve (EKC) across all quantiles. The effect of economic growth in MICs turns to improve environmental indicators in the long run. Accordingly, the study recommends that MICs give priority to reducing income inequality to ensure the continuity of achieving economic growth that improves environmental indicators in the long run, according to the EKC.

Keywords: Environmental degradation; Income inequality; Marginal propensity to emit; Quantile regression with fixed effect; Method of moments quantile regression (search for similar items in EconPapers)
JEL-codes: O15 O44 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s11205-023-03068-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:soinre:v:166:y:2023:i:2:d:10.1007_s11205-023-03068-y

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11135

DOI: 10.1007/s11205-023-03068-y

Access Statistics for this article

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement is currently edited by Filomena Maggino

More articles in Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().