The Opposite Effect of Income and Income Inequality with Environmental Pollution in the Provinces of Iran

Document Type : Research Paper

Authors

1 Associate Professor of Economics, Yazd University, Yazd, Iran.

2 Master of Economics, Bu-Ali Sina University, Hamedan, Iran.

3 Master of Accounting, Shahid Chamran University, Ahvaz, Iran.

4 Master of Economics, Allameh Tabataba'i University, Tehran, Iran

Abstract

Income inequality is the result of the economic, social, and political characteristics of a society and it affects the quality of the environment by changing the behavior patterns of social classes. In this research, two patterns have been explained to investigate the relationship between income inequality and environmental degradation in Iran's provinces in 1393-1399 using the generalized least squares method. In the research models, carbon dioxide emission variables have been used as a component for environmental degradation and the Gini coefficient as a component for income inequality. The results of the panel Granger causality test show that there is a one-way causality from income inequality to environmental destruction. According to the results of the first model, income inequality has a positive and significant effect on the pollution index; this means that with an increase of 1 unit of inequality, the total amount of pollution (CO2 emission) increases by 5876232 units. The variables GDP per capita and the square root of GDP per capita do not have a statistically significant effect on CO2 emissions; in this way, during the period under review, the environmental hypothesis of Kuznets is not confirmed in the provinces of Iran. In addition, education and energy intensity have a negative and significant effect and the industry structure has a positive and significant effect on environmental pollution. According to the results of the second model, the amount of CO2 emission has no significant effect on the inequality index. In addition, the GDP per capita variable has a statistically significant and negative effect on the inequality index; this means that with an increase of 1 unit of GDP (income) per capita, the inequality decreases by -0.0592 units. On the other hand, the second power of GDP per capita has a positive and significant effect on income inequality; that is, in this time period, there is a U-shaped relationship between GDP per capita and income inequality in the provinces of Iran. Therefore, Kuznets's hypothesis is not approved in Iran. In addition, education and environmental protection budgets have a positive and significant effect on income inequality, while unemployment and taxes do not have a significant effect on income inequality

Keywords

References

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Journal of Environmental and Natural Resource Economics
Volume 4, Issue 8
June 2024
Pages 75-101

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History

  • Receive Date: 25 November 2023
  • Revise Date: 15 August 2024
  • Accept Date: 24 August 2024

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