Taming the SO2 and NOx emissions: evidence from a SUR model for the US
We construct a Seemingly Unrelated Regression (SUR) model to investigate the link between local environmental pollution (sulfur dioxide-SO2 and nitrogen oxides-NOx emissions) and economic growth on a panel data set framework for the US over the period 1990–2012. The presence of different polynomials of GDP for each equation of SO2 and NOx respectively allows us to utilize a SUR model to estimate jointly the two equations in order to examine the total effect of environmental degradation. While we find evidence of a quartic relationship between SO2 emissions and economic development in a single equation framework this outcome does not seem to hold when we utilize a SUR model controlling for cross section dependence.
KeywordsEnvironmental Kuznets curve SUR Cross section dependence Local pollutants
JEL ClassificationC33 Q56 Q43
The authors would like to thank the Editor-in-Chief Henrik Folmer for giving them the opportunity to revise their work. Special thanks also go to the fruitful comments and suggestions made by two anonymous reviewers of this journal that enhanced the merit of the paper. The authors also wish to express their gratitude to the Organizational Committee of the 4th Environmental Economics and Natural Resources Conference organised by the University of Thessaly, in Volos, Greece (November 4–5, 2016). Special acknowledgements should be given to Professor George Halkos and the participants of the conference for their fruitful comments and suggestions that enhance the merit of the paper. All remaining errors belong to the authors. The usual disclaimer applies.
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