Does China Fall into Poverty-Environment Traps? Evidence from Long-term Income Dynamics and Urban Air Pollution

Jian-Xin Wu, Ling-Yun He and ZhongXiang Zhang
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Jian-Xin Wu: College of Economics, Jinan University

No 2019.05, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines the long-run relationship between income and urban air pollution using a joint distribution dynamics approach. This approach enables to estimate the transition process and long-run distribution and to examine the mechanisms behind the evolution process. The approach is applied to a unique panel data of CO2, SO2 and PM2.5 (particulate matter smaller than 2.5µm) for 286 Chinese cities over the period 2002-2014. Strong persistence in the transition dynamics suggests that this convergence process may require a long time. The distribution dynamics analyses indicate that multiple equilibria are the major characteristics in the long-run relationship between income and urban air pollution in China, which implies that inter-regional technology spillover may be an important way to accelerate convergence. Our results further support the existence of poverty-environmental trap in PM2.5 concentrations. Thus, new environmental models are expected to be developed to explain this new stylized fact. The findings provide strong support for taking more aggressive measures that consider income and urban environment simultaneously to reduce poverty and air pollutions together in the Chinese cities.

Keywords: Income; Urban Air Pollution; Poverty-environment Trap; Distribution Dynamics Approach; China (search for similar items in EconPapers)
JEL-codes: O13 O44 Q43 Q53 Q56 Q58 (search for similar items in EconPapers)
Date: 2019-03
New Economics Papers: this item is included in nep-cna, nep-ene, nep-env, nep-tra and nep-ure
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Working Paper: Does China Fall into Poverty-Environment Traps? Evidence from Long-term Income Dynamics and Urban Air Pollution (2019)
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