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A Nonlinear Analysis of CO2-Income Relation for Advanced Countries

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  • Massimiliano Mazzanti
  • Antonio Musolesi

Abstract

We study long run carbon emissions - income relationships for advanced countries grouped in policy relevant groups - North America and Oceania, South Europe, North Europe. By relying on recent advances on Generalized Additive Models and adopting interaction models, we handle simultaneously three main econometric issues, named here as functional form bias, heterogeneity bias and omitted time related factors bias, which have been proved to be relevant but have been addressed separately in previous papers. We consider a model which includes both country-specifi c nonparametric time eff ects and country-speci c nonparametric income eff ects. We fi nd that country-speci c time related factors weight more than income in driving the northern EU Environmental Kuznets Curves, that cross country heterogeneity is high and that only two countries - Finland and Sweden - show bell shapes for both income and time relationships to CO2. Overall, the countries di ffer more on their carbon-time relation than on the carbon-income relation which is in almost all cases monotonic positive. The former may represent idiosyncratic innovation, energy and policy features of the countries under study.

Suggested Citation

  • Massimiliano Mazzanti & Antonio Musolesi, 2013. "A Nonlinear Analysis of CO2-Income Relation for Advanced Countries," Working Papers 2013072, University of Ferrara, Department of Economics.
    • Handle: RePEc:udf:wpaper:2013072
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    References listed on IDEAS

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    1. Augustin, Nicole H. & Musio, Monica & von Wilpert, Klaus & Kublin, Edgar & Wood, Simon N. & Schumacher, Martin, 2009. "Modeling Spatiotemporal Forest Health Monitoring Data," Journal of the American Statistical Association, American Statistical Association, vol. 104(487), pages 899-911.
    2. Carlos Ordás Criado & Simone Valente & Thanasis Stengos, 2009. "Growth and the pollution convergence hypothesis: a nonparametric approach," CEPE Working paper series 09-66, CEPE Center for Energy Policy and Economics, ETH Zurich.
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    More about this item

    Keywords

    Semi parametric models; GAM; interaction models; environmental Kuznets curve;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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