Economic Growth and the Environmental Kuznets Curve in Taiwan: A Simultaneity Model Analysis

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Title:	Economic Growth and the Environmental Kuznets Curve in Taiwan: A Simultaneity Model Analysis
Authors:	Hung, Ming-feng;Shaw, Daigee
Contributors:	淡江大學產業經濟學系
Keywords:	補正完畢
Date:	2004-09
Issue Date:	2009-11-30 18:00:33 (UTC+8)
Publisher:	Northhampton, Mass. : Edward Elgar Publishing
Abstract:	This paper uses panel data on Taiwan to examine the Environmental Kuznets Curve (EKC) relationship between per capita income and air pollution. In the EKC literature, EKC is always estimated in the form of a single equation. However, since both income and environmental quality are endogenous variables, i.e., they impact upon each other, the estimation of single equation relationships where simultaneity exists will produce biased and inconsistent estimates. We specify the channels through which Y (income) affects P (pollution) and P affects Y in a conceptual model and then formulate a two-equation simultaneous model for empirical research. We test for exogeneity with the Hausman test and estimate the simultaneity model using the two-stage least squares method. The inverted U-shaped relationships are found between NO2/CO and per capita income in Taiwan. As income grows, there is first an increase in the levels of NO2 and CO, followed by a decrease. Air pollution, however, does not significantly affect income.
Relation:	Human Capital, Trade and Public Policy in Rapidly Growing Economies: From Theory to Empirics, pp.269-290
Appears in Collections:	[Graduate Institute & Department of Industrial Economics] Chapter

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