Ordás Criado, Carlos and Valente, Simone and Stengos, Thanasis (2009): Growth and the pollution convergence hypothesis: A nonparametric approach.
Download (932kB) | Preview
The pollution-convergence hypothesis is formalized in a neoclassical growth model with optimal emissions reduction: pollution growth rates are positively correlated with output growth (scale effect) but negatively correlated with emission levels (defensive effect). This dynamic law is empirically tested for two major and regulated air pollutants - nitrogen oxides (NOX) and sulfur oxides (SOX) - with a panel of 25 European countries spanning over years 1980-2005. Traditional parametric models are rejected by the data. However, more flexible regression techniques - semiparametric additive specifications and fully nonparametric regressions with discrete and continuous factors - confirm the existence of the predicted positive and defensive effects. By analyzing the spatial distributions of per capita emissions, we also show that cross-country pollution gaps have decreased over the period for both pollutants and within the Eastern as well as the Western European areas. A Markov modeling approach predicts further cross-country absolute convergence, in particular for SOX. The latter results hold in the presence of spatial non-convergence in per capita income levels within both regions.
|Item Type:||MPRA Paper|
|Original Title:||Growth and the pollution convergence hypothesis: A nonparametric approach|
|Keywords:||Air pollution, convergence, economic growth, mixed nonparametric regressions, distribution dynamics.|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C14 - Semiparametric and Nonparametric Methods: General
C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C23 - Models with Panel Data; Longitudinal Data; Spatial Time Series
Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
|Depositing User:||Simone Valente|
|Date Deposited:||25. Sep 2009 01:54|
|Last Modified:||13. Feb 2013 00:27|
Andreoni, J. and A. Levinson, “The simple analytics of the environmental Kuznets curve,” Journal of Public Economics, 2001, 80, 269–286.
Barro, R.J. and X. Sala i Martin, Economic Growth, second ed., Massachusetts: The MIT Press, 2004.
Bratberg, E., S. Tjotta, and T. Oines, “Do voluntary environmental agreements work?,” Journal of Environmental Economics and Managment, 2005, 50, 583–597.
Breusch, T.S. and A.R. Pagan, “A simple test for heteroscedasticity and random coefficient variation,” Econometrica, 1979, 47, 1287–1294.
Brock, W.A. and M.S. Taylor, “Economic growth and the environment: a review of theory and empirics,” Working paper 10854, NBER Oct. 2004.
Brock, W.A. and M.S. Taylor, “The Green Solow Model,” Working paper 10557, NBER June 2004.
Bulte, E., J. List, and M.C. Strazicich, “Regulatory Federalism and the Distribution of Air Pollutant Emissions,” Journal of Regional Science, 2007, 47(1), 155–178.
Fan, J. and R. Li, “New estimation and model selection procedure for semiparametric modeling in longitudinal data analysis,” Journal of American Statistical Association, 2004, 99, 710–723.
Fan, J., W. Haerdle, and E. Mammen, “Direct Estimation of Additive and Linear Components for High-Dimensional Data,” The Annals of Statistics, 1998, 26, 943–971.
Finus, M. and S. Tjotta, “The Oslo Protocol on sulfur reduction: the great leap forward?,” Journal of Public Economics, 2003, 87, 2031–2048.
Greene, W.H., Econometric Analysis, 5th ed., Prentice Hall International, 2003.
Gu, C., Smoothing Spline ANOVA Models, New York: Springer, 2002.
Hastie, T. and R. Tibshirani, Generalized Additive Models, Chapman and Hall, 1990.
Hsiao, C., Q. Li, and J.S. Racine, “A Consistent Model Specification Test With Mixed Categorical and Continuous Data,” Journal of Econometrics, 2007.
Johnson, P.A., “A Nonparametric Analysis of Income Convergence accross the U.S. States,” Economics Letters, 2000, 69, 219–223.
Koenker, R., “A Note on Studentizing a Test for Heteroscedasticity,” Journal of Econometrics, 1981, 17(1), 107–112.
Li, Q. and J.S. Racine, “Nonparametric estimation of distributions with categorical and continuous data,” Journal of Multivariate Analysis, 2003, 86, 266–292.
List, J.A., “Have Air Pollutant Emissions Converged Among U.S. Regions? Evidence from Unit Root Tests,” Southern Economic Journal, 1999, 66 (1), 144–155.
Maasoumi, E., J. Racine, and T. Stengos, “Growth and convergence: A profile of distribution dynamics and mobility,” Journal of Econometrics, 2007, 136, 483–508.
Maddison, A., “Historical Statistics,” Online data, Groningen Growth and Development Center, University of Groningen, October 2008. http://www.ggdc.net/maddison.
Murdoch, J.C., T. Sandler, and K. Sargent, “A Tale of Two Collectives: Sulphur versus Nitrogen Oxides Emission Reduction in Europe,” Economica, 1997, 64, 281–301.
Ordás Criado, C. and J.-M. Grether, “Convergence in CO2 per capita emissions: a robust distributional approach.,” Working paper, 17th Annual Conference of the European Association of Environmental and Resource Economists (EAERE), Amsterdam 2009.
Quah, D., “Empirical cross-sectional dynamics in economic growth,” European Economic Review, 1993, 37, 426–434.
Racine, J. and Q. Li, “Nonparametric estimation of regression functions with both categorical and continuous data,” Journal of Econometrics, 2004, 119, 99–130.
Silverman, B.W., Density estimation for statistics and data analysis, London: Chapman and Hall, 1986.
Stockey, N., “Are there limits to growth,” International Economic Review, 1998, 39(1), 1–31.
Stone, C., “Additive regression and other nonparametric models,” Annals of Statistics, 1985, 13, 689–705.
Strazicich, M.C. and J.A. List, “Are CO2 Emissions Levels Converging Among Industrial Countries?,” Environmental and Resource Economics, 2003, 24, 263–271.
Van der Ploeg, F. and C. Withagen, “Pollution control and the Ramsey problem,” Environmental and Resource Economics, 1991, 1(2), 215–236.
Van, P. Nguyen, “Distribution Dynamics of CO2 Emissions,” Environmental and Resource Economics, 2005, 32.
Wood, S., “Modeling and Smoothing parameter estimation with multiple quadratic penalties,” Journal of Royal Statistical Aociety, 2000, Series B 65, 95–114.
Wood, S., “Stable and efficient multiple smoothing parameter estimation for generalized additive models,” Journal of American Statistical Association, 2004, 99, 673–686.
Wood, S., Generalized Additive Models: An Introduction with R, Chapman & Hall, Texts in Statistical Sciences, 2006.