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Output and Pollution Abatement in a U.S. State Emission Function

Neophyta Empora, Theofanis P. Mamuneas and Thanasis Stengos ()

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This study models the relationship between emissions, output and pollution abatement, by defining an emission function in a manner that is consistent with the residual generation mechanism and firms’ optimizing behavior. The relationship is estimated by applying semiparametric estimation and threshold regression on U.S. state-level data from 1973-1994. The results provide a positive nonlinear relationship between emissions and output, rejecting an inverted-U type of relationship between the two (EKC). In the absence of abatement the relationship turns around, verifying the arguments in the literature, that abatement is one of the driving forces for an EKC to emerge.

Keywords: Environmental Kuznets Curve; emissions; pollution abatement; residual generation mechanism; semiparametric estimation; threshold regression (search for similar items in EconPapers)
JEL-codes: Q50 Q52 Q53 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2017-11
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