Three essays on income, inequality and environmental degradation
This dissertation, a compilation of three essays, explores the interrelationships between income, income inequality, and environmental degradation. The first essay investigates the degree to which income inequality and access to government affects the percentage of national income spent by the government on public goods. Using a dataset consisting of 26 OECD countries and 14 years, ordinary least squares is employed to determine the effects of income and political inequality on pollution abatement and control expenditure, public education, and public health. The conclusion is that equality—both economic and political—promotes greater investment in public goods.
The second essay delves into the effects of income on per capita emissions of four pollutants: carbon dioxide, carbon monoxide, sulfur dioxide, and volatile organic compounds. Using panel datasets, consisting of 16 years and 35 countries, feasible general least squares is employed to determine the effect of income, the structural composition of the economy, and the level of democracy on per capita emissions. Only emissions of sulfur dioxide tend to decline as income increased; however, increases in democracy were associated with declines in the per capita emissions of all contaminants. Decreases in the percentage of GDP contributed by the industrial sector with respect to that from the service sector likewise were associated with decreases in emissions.
Finally, the third essay uses a panel dataset of 77 countries and 16 years to investigate whether international trade significantly affects the amount of per capita carbon dioxide emitted in a country, and whether that effect differs between high- and low-income countries. Using feasible general least squares, results show evidence of continued migration of dirty industries from high- to low-income countries, as well as evidence that while the effect of trade does not differ significantly between high- and low-income countries, the effects of trade in certain “dirty” industries does.