Environmental Kuznets Curve and Income Inequality: Pooled Mean Group Estimation for Asian Developing Countries

Saif Ullah and Masood Sarwar Awan

Abstract

Current study explores the association between environmental quality and economic growth along with role of income inequality within Environmental Kuznet Curve (EKC) framework by using three environmental quality variables (CO2, SO2 emission and PM2.5 concentration). The panel data of developing Asian countries have been employed for the investigation. Empirical analysis has been carried out by using PMG estimation technique. Results confirmed the presence of EKC for all environmental quality indicators for developing Asian economies in the long run. However, it does not hold in case of any environment quality indicator in the short run. Moreover, the findings reveal that income inequality is positively related to CO2, SO2 emission and PM2.5 concentrations. It indicates that rise in income inequality leads to increase CO2, SO2 emission and PM2.5 concentrations in the atmosphere. Furthermore, population density, urban population, foreign direct investment and trade openness are also positively related with all environmental quality variables.