Environmental Engineering Reference
In-Depth Information
They found evidence for the EKC. As the chosen tax rate increased with
income, abatement occurred after a certain range, and therefore environ-
mental quality deteriorated at i rst and then improved.
Also Chaudhuri and Pfaf (2002), using the above model, studied the
linkages between household fuel-choice preference and income on the envi-
ronment, specii cally indoor air pollution, in Pakistan. The individual and
house-level data were obtained from the Pakistan Integrated Household
Survey (1991), which covered the energy consumption of 4800 households.
To derive their sample, they used a multi-state stratii ed sampling proce-
dure from the Federal Bureau of Statistics based on the 1981 census. The
authors found signii cant evidence of an inverted U-shaped relationship
between monthly household income and monthly household emissions, in
terms of the quantity of the monthly fuel consumption due to the transi-
tion in the fuel-choice behaviour of the household. As per capita income
increased, the household moved from using traditional fuel and invested
in cleaner modern fuel. However, for all modern fuel consumption, their
quantities increased with higher incomes, forming a concave curve.
In a recent study by Khanna and Plassmann (2004), they examined the
impact of demand for environmental quality on the relationship between
income and pollution. They argued that the ability of the consumers to
separate themselves from the source of pollution played a decisive role
in the consumer's decision to limit their exposure to pollution as income
increased. Also they argued that the turning point of the EKC would be
lower for pollutants where spatial separation was possible. Unlike Shai k
and Bandhopadhyay (1992) and Suri and Chapman (1998) who used
multi-country panel data that combined the ef ects of other factors, such
as structural changes, technology and consumer preferences for environ-
mental quality, Khanna and Plassmann used cross-sectional census-tract-
level data for the United States to isolate the ef ects of changes in income
from those in other factors. The census-tract-level data were the smallest
geographical unit for which detailed socioeconomic data were available.
The authors tested their hypothesis on i ve air pollutants: SO
2
, particulate
matter (PM), CO, ground level O
3
and NO
x
. They used ambient con-
centrations data from the EPA AIRS database. They found an EKC
relationship for SO
2
and PM, with turning points of $8653 and $11 412,
respectively. For the other three pollutants, the income-pollution relation-
ship continued to increase.
The authors concluded that the EKC hypothesis was an equilibrium
relationship between income and pollution based on the interaction
between consumer preferences and technology. For pollutants where
spatial separation was relatively straightforward, the opportunity cost of
pollution abatement was relatively low, and therefore the turning point of
