nep-agr New Economics Papers
on Agricultural Economics
Issue of 2012‒11‒11
twenty-two papers chosen by
Angelo Zago
University of Verona

  1. Impact of land certification on tree growing on private plots of rural households: Evidence from Ethiopia By Mekonnen, Alemu; Ghebru, Hosaena; Holden, Stein; Kassie, Menale
  2. Agriculture, Markets and Poverty - A Comparative Analysis of Laos and Cambodia By Raghav Gaiha; Md Shafiul Azam; Samuel Annim; Katsushi S. Imai
  3. Monitoring and Evaluation of Agricultural Policy Indicators By Briones, Roehlano M.; David, Cristina C.; Intal, Ponciano Jr. S.; Ballesteros, Marife M.; Inocencio, Arlene E.; Geron, Ma. Piedad S.
  4. Why did agricultural labour productivity not converge in Europe from 1950 to 2005? By Miguel Martín-Retorillo; Vincente Pinilla
  5. Agriculture, technological change and environmental sustainability: Looking for a win-win water policy strategy By Llop Llop, Maria; Ponce Alifonso, Xavier,
  6. Credit Subsidy in Philippine Agriculture By Casuga, Magdalena S.; Geron, Ma. Piedad S.
  7. Are high labour costs destroying the competitiveness of Danish dairy farmers? Evidence from an international benchmarking analysis By Mette Asmild; Kurt Nielsen; Peter Bogetoft
  8. Actions with economic elements embedded in the social networks of Danish farmer investors abroad By Luljeta Hajderllari
  9. Rice Prices and the National Food Authority By Intal, Ponciano Jr. S.; Cu, Leah Francine; Illescas, Jo Anne
  10. The Role of Land Certification in Reducing Gender Gaps in Productivity in Rural Ethiopia By Bezabih, Mintewab; Holden, Stein; Mannberg, Andrea
  11. Nature and Dimensions of Farmers’ Indebtedness in India By Rajeev, Meenakshi; Vani , B P; Bhattacharjee, Manojit
  12. A Supply-Response Model Under Invariant Risk Preferences By Robert Chambers; Margarita Genius; Vangelis Tzouvelekas
  13. Peasant Agriculture and Economic Growth: The Case of Southeast Europe c. 1870-1940 reinterpreted By Michael Kopsidis
  14. Rent Seeking and the Smoke and Mirrors Game in the Creation of Forest Sector Carbon Credits: An Example from British Columbia By G. Cornelis van Kooten; Tim Bogle; Frans P. de Vries
  15. Migration, Remittances and Rural Employment Patterns: Evidence from China By Sylvie Démurger; Li Shi
  16. Economic and environmental effects of the CO2 taxation: an input-output analysis for Spain By Gemechu, Eskinder D.; Butnar, Isabela; Llop Llop, Maria; Castells i Piqué, Francesc
  17. Poverty and Agriculture in the Philippines: Trends in Income Poverty and Distribution By Tabuga, Aubrey D.; Reyes, Celia M.; Asis, Ronina D.; Datu, Maria Blesila G.
  18. How Does Child Labor Affect the Demand for Adult Labor? Evidence from Rural Mexico By Kirk Doran
  19. Modeling Artisanal Fisheries and Hydroelectricity in Relation to the Itezhi-tezhi Dam on the Kafue River, Zambia By Richard Jensen
  20. The Demand for Tobacco in Post-Unification Italy By Ciccarelli, Carlo; De Fraja, Gianni
  21. Shocks, individual risk attitude, and vulnerability to poverty among rural households in Thailand and Vietnam By Gloede, Oliver; Menkhoff, Lukas; Waibel, Hermann
  22. Is there an Environmental Kuznets Curve in the Carbon Dioxide Emissions? By Pandelis Mitsis

  1. By: Mekonnen, Alemu (Addis Ababa University and EEPFE/EDRI); Ghebru, Hosaena (IFPRI); Holden, Stein (School of Economics and Business); Kassie, Menale (CIMMYT)
    Abstract: The paper examines the impact of land certification on tree growing on private plots of rural households in the Amhara and Tigray regions of Ethiopia. Household and plot level panel data from before and after land certification from stratified random samples of households were used for the analysis. The results suggest a positive impact of land certification on tree growing on private plots of rural households. Law restrictions on tree planting on land suitable for agricultural production may explain why positive but lower investments in tree growing were found on plots that had been exposed to public conservation programs. The study questions the rationale of prohibiting tree growing on degraded agricultural land where tree growing is more profitable and more sustainable than continued growing of food crops.
    Keywords: Land certification; tenure security; incentives for tree planting; investment impact; law restrictions
    JEL: K11 Q15 Q23 Q24 Q56
    Date: 2012–09–01
  2. By: Raghav Gaiha (Economics, Australian National University (Australia)); Md Shafiul Azam (Economics, School of Social Sciences, University of Manchester (UK)); Samuel Annim (Department of Economics, University of Central Lancashire (UK)); Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan))
    Abstract: Laos and Cambodia have been transitioning to a market-oriented policy regime. Both are agrarian economies with agriculture contributing about one-third of the GDP. We assess prospects of achieving MDG1 and centrality of agricultural growth in achieving this goal. As these are macro relationships, richer insights into determinants of poverty are obtained by detailed analyses of recent household surveys in Laos and Cambodia. Some of these insights relate to access to markets, returns to crops, education, land size, non-farm activities, ethnic affiliation, and rural infrastructure, with unavoidable variation due to differences in the coverage of the household surveys used. Another major theme studied for Cambodia is integration of farmers - especially smallholders - into markets. The focus is on barriers between large and smallholders-for example, transaction costs. An accelerated transition to a more market-oriented policy regime may promote not just a more efficient agriculture but also a more equitable outcome.
    Keywords: Aagriculture, Poverty, MDG1, Smallholders, Markets, Transaction costs, Laos and Cambodia
    JEL: N55 H53 I32
    Date: 2012–10
  3. By: Briones, Roehlano M.; David, Cristina C.; Intal, Ponciano Jr. S.; Ballesteros, Marife M.; Inocencio, Arlene E.; Geron, Ma. Piedad S.
    Abstract: This study proposes a set of indicators for monitoring and evaluation of agricultural policy, patterned after the support estimates of the Organization for Economic Cooperation and Development (OECD). The main indicators are: producer support (incorporating indirect market support, and direct input support through irrigation, credit, and land transfer); general services support; and public expenditures for agriculture. The study finds that these indicators are viable measures of public support and may be consistently updated over time. Past trends in policy indicators suggest that price policy played the biggest role in agricultural support. Low to negative support to agriculture up to the late 1980s was due largely to indirect taxation of agriculture. From the 1990s onward though the protection structure swung in favor of agriculture resulting in expanding producer support, further enhanced by increasing budgetary outlays for agriculture, mostly toward provision of private goods (such as fertilizer subsidies). These patterns suggest resource misallocation, which may be remedied by rationalizing price policy as well as budgetary allocation from agricultural support services of DA (and land acquisition by DAR), toward provision of public goods such as R&D, extension, regulation, and participatory irrigation investments.
    Keywords: agricultural support, price policy, public goods
    Date: 2012
  4. By: Miguel Martín-Retorillo (Universidad de Zaragoza); Vincente Pinilla (Universidad de Zaragoza)
    Abstract: This paper offers a long-term analysis of agricultural labour productivity differences in Europe using econometric techniques. The results show the crucial importance of the land/labour ratio. The continuous exit of manpower from the sector, coupled with increased use of productive factors originating in other sectors of the economy, caused the efficiency of agricultural workers to rise. The different relative importance of these processes across countries largely explains why labour productivity did not converge. In turn, institutions have apparently conditioned differences in productivity, as a direct and inverse relation is detected between membership of the EU and the Communist block and the productivity of agricultural labour.
    Keywords: Agricultural labour productivity, European agriculture 20th century, European economic development
    JEL: N50 N54 O13 Q10
    Date: 2012–10
  5. By: Llop Llop, Maria; Ponce Alifonso, Xavier,
    Abstract: This paper analyses the effects that technological changes in agriculture would have on environmental, social and economic indicators. Specifically, our study is focused on two alternative technological improvements: the modernization of water transportation systems versus the increase in the total factor productivity of agriculture. Using a computable general equilibrium model for the Catalan economy, our results suggest that a water policy that leads to greater economic efficiency is not necessarily optimal if we consider social or environmental criteria. Moreover, improving environmental sustainability depends less on the type of technological change than on the institutional framework in which technological change occurs. Keywords: agricultural technological changes, computable general equilibrium model, economic impact, water policy
    Keywords: Agricultura -- Innovacions tecnològiques, Equilibri (Economia), Aigua -- Abastament -- Política governamental, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2012
  6. By: Casuga, Magdalena S.; Geron, Ma. Piedad S.
    Abstract: This study attempts to measure subsidies to agricultural credit in recent years and provides policy implications. It finds that credit policy has evolved, from provision of subsidized credit to one that is more market-oriented, focusing on providing access to credit to farmers while exposing them to market interest rates. Nevertheless, there remains a significant public outlay for credit largely through unintended default subsidy. It recommends that publicly supported credit be provided solely through competent government financial institutions under independent regulatory oversight, rather than through agencies (such as the Agricultural Credit Enhancement Fund) or through government-owned and controlled corporations (such as QUEDANCOR). Government may also need to invest in other support services that would attenuate agricultural risk and encourage greater private sector participation in agricultural lending.
    Keywords: Philippines, credit subsidy, market-oriented policy, default risk, risk reduction
    Date: 2012
  7. By: Mette Asmild (Institute of Food and Resource Economics, University of Copenhagen); Kurt Nielsen (Institute of Food and Resource Economics, University of Copenhagen); Peter Bogetoft (Department of Economics, Copenhagen Business School)
    Abstract: This paper analysis the competitiveness of Danish dairy farmers relative to dairy farmers in other Northern European countries. We use individual farm accounts data from the European Commission’s Farm Accountancy Data Network (FADN) and have an average of 1665 observations per year in the period from 2002 to 2008. In all years, the hourly pay for labour is highest in Denmark and the difference is increasing, especially in 2007 and 2008. We apply Data Envelopment Analysis in a new way to capture the effect on the competitiveness from these differences in labour costs. We compare the distributions of efficiency scores in different countries to assess their relative competitiveness. To analyze the effect of labour costs we apply two different DEA models; one including the labour input as hours worked and the other including labour costs. This way we capture the effect of labour costs on the differences in average efficiencies between countries. The results shows that the Danish dairy farmers, on average, were the most economically efficient in Northern Europe in 2007 and 2008. We find that the effect of labour costs for the Danish dairy farmers is decreasing during the study period despite of the salary differences increasing. In 2002 the negative impact of having the highest hourly pay was an average 4.7 percentage points whereas it in 2008 was only 0.6 percentage points.This indicates that the Danish dairy farmers have been highly successful in adapting to having the highest, and increasing, hourly labour costs in Northern Europe.
    Keywords: International benchmarking, Data Envelopment Analysis, Agriculture, FADN data
    Date: 2012–06
  8. By: Luljeta Hajderllari (Institute of Food and Resource Economics, University of Copenhagen)
    Abstract: The main aim of this paper is to investigate the “embeddedness” of business relationships with social relationships of Danish farmer investors (DFI) concerning agricultural investment and expansion abroad. A survey was sent to 61 DFIs with activities in Central and Eastern European countries who are members of an organisation named Danish Farmers Abroad. The survey elicited information regarding their organisational network connections to other DFIs who also have activities abroad. Information about the DFIs’ network was obtained regarding their business relationships (cooperation, competition and advice given and received to and from other DFIs) and social relationships (friendship). The data of the four different networks was analysed by the Double Dekker Semi-Partialling Multiple Regression Quadratic Assignment Procedure in UCINET. The results indicate that cooperation as well as received and given advice are positively related to social ties, whereas competition is negatively related to social ties. These results support the idea that business relationships (with the exception of competition) of DFIs are embedded in social relationships. This indicates that the same actors may behave less cooperatively in environments with low trust where they have to compete for scarce resources.
    Keywords: Embeddedness, social network analysis, Danish farmer investors
    JEL: M14 L22
    Date: 2012–10
  9. By: Intal, Ponciano Jr. S.; Cu, Leah Francine; Illescas, Jo Anne
    Abstract: This study examines the performance of the National Food Authority (NFA) with respect to its function of price stability and implications for public finances, and recommends policy reforms where warranted. It finds that NFA has been unsuccessful in stabilizing producer prices, but relatively successful in stabilizing retail prices, largely through exercise of its import monopoly. However, it does so at high cost, partly due to operational inefficiency, but largely owing to its fundamental policy mandate. The study recommends relinquishing this mandate, and leaving a greater role for the private sector in stabilizing rice prices, with NFA function and price policy limited to maintaining strategic reserves a variable import levy.
    Keywords: Philippines, price stabilization, food security, financial sustainability, National Food Authority
    Date: 2012
  10. By: Bezabih, Mintewab (Department of Economics, University of Sussex); Holden, Stein (Department of Economics and Resource Management, Norwegian University of Life Sciences); Mannberg, Andrea (Department of economics, Umeå university)
    Abstract: This paper analyses the impact of a low cost and restricted rights land certification program on the productivity of female-headed households. The analysis is based on plot level panel data from the East Gojjam and South Wollo Zones in the Amhara region of Ethiopia. The results suggest a positive and significant effect of certification on plot-level productivity, particularly on plots rented out to other operators. In addition, the results show that certification has different impacts on male and female productivity with female-headed households gaining significantly more and with zonal differences in the effectiveness of certification impacts.
    Keywords: Ethiopia; Female Headed Households; Productivity; Land Market; Certification
    JEL: D02 Q12 Q15
    Date: 2012–09–01
  11. By: Rajeev, Meenakshi; Vani , B P; Bhattacharjee, Manojit
    Abstract: This paper examines nature and extent of farmers’ indebtedness in India using unit record data from NSSO 59th round, and provided a comparative picture of major Indian states. It shows using data from rice cultivating farmers that productivity of small farmers is not only higher than the medium farmers, it increases with access to credit. In terms of access to credit, seen through extent of indebtedness, Karnataka is better placed than many Indian states. But Andhra Pradesh, Tamil Nadu, Punjab and Kerala lie ahead of Karnataka. Ironically however, almost half of the credit is still provided by the informal sector in the state of Karnataka (on an average). Region wise picture shows that Southern region is more dependent on informal sources of credit. Poor farmers with lower land holdings are much more deprived of the formal sources of credit than the comparatively richer ones. Thus they also pay a much higher rate of interest with modal value of 36%. But it is heartening to note that loans are taken mostly for income generating purposes. It also indirectly implies that even for the income generating purposes poor are not getting access to formal sources of credit.
    Keywords: Incidence of indebtedness; productivity analysis; formal sector credit; indebted households
    JEL: A10 C80
    Date: 2012–10–31
  12. By: Robert Chambers (University of Maryland); Margarita Genius (Department of Economics, University of Crete, Greece); Vangelis Tzouvelekas (Department of Economics, University of Crete, Greece)
    Abstract: In this article we rst develop a theoretically consistent supply-response model for producers with invariant preferences facing price risk, and then we empirically apply the model for a group of Cretan olive-oil producers. For doing so, we estimate a Generalized Leontief cost function and we use the price distribution historically faced by individual farmers to induce three dierent representations of price risk corresponding to the second, third and fourth lp norms. These risk measures are combined with the estimated cost-structure to provide three separate representations of the ecient frontier for the representative producer. Empirical results suggest that, regardless of risk measure used, all farmers curtail production in managing price risk.
    Keywords: price risk; invariant risk preferences; producer responses; Cretan olive-oil producers
    JEL: C33 C22 D81 Q11
    Date: 2012–11–04
  13. By: Michael Kopsidis (Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO / Halle))
    Abstract: Still in recent research a low productive peasant economy and traditional peasant society are often made responsible for Southeast Europe's economic backwardness prior to 1945. However, the radical change of paradigm after 1960 in the view of peasants as agents of economic growth and of their ability to adjust to markets has surprisingly never been realized in economic history research on the Balkan-states (Romania, Bulgaria, Yugoslavia, Greece). Interpreting agricultural development as a mainly demand-driven process this paper argues that the potential for agricultural growth was much more restricted in Southeast than in Northwest Europe but Balkan peasants seem to have exploited their growth potential as far as possible. There is a lot of evidence that the reasons for sluggish growth before 1940 were definitely not rooted in any 'peasant traditionalism' as often claimed by Balkan elites and many scholars.
    Keywords: Romania, Bulgaria, Yugoslavia, Greece, agricultural development, peasant economy
    JEL: N53 N54 O13
    Date: 2012–10
  14. By: G. Cornelis van Kooten; Tim Bogle; Frans P. de Vries
    Abstract: From a cost standpoint and as demonstrated in this paper, it is beneficial to permit forest-sector carbon offsets in lieu of carbon dioxide emissions reduction. Such offsets play a role in voluntary markets and Europe’s Emission Trading System. However, problems related to additionality, leakages, duration and impermanence, high transaction costs, and governance raise important questions about the validity of most carbon offset credits from forestry. Using data for a forest estate in south-eastern British Columbia owned by the Natural Conservancy of Canada (NCC), we construct a forest management model to demonstrate that the planned NCC management program yields questionable forest carbon offsets. NCC management results in slightly less annual carbon sequestration than leaving the forest as wilderness, but sustainable commercial management of the site sequesters between 8 and 270 thousand tonnes of CO2 more per year than NCC management. Because commercial exploitation was the counterfactual used to justify the NCC carbon offsets, offsets were subsequently sold to non-arms-length buyers, and numbers of carbon offsets are highly sensitive to assumptions, one can only conclude that the carbon offsets generated by this (and probably many other) forest conservation projects are simply spurious.
    Keywords: climate change and forestry; forest carbon offsets; forest conservation; REDD
    JEL: Q54 Q23 P28
    Date: 2012–08
  15. By: Sylvie Démurger (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Li Shi (School of Economics and Business Administration - Beijing Normal University / Beijing)
    Abstract: This paper explores the rural labor market impact of migration in China using crosssectional data on rural households for the year 2007. A switching probit model is used to estimate the impact of belonging to a migrant-sending household on the individual occupational choice categorized in four binary decisions : farm work, wage work, self-employment and housework. The paper then goes on to estimate how the impact of migration differs across different types of migrant households identified along two additional lines : remittances and migration history. Results show that individual occupational choice in rural China is responsive to migration, at both the individual and the family levels, but the impacts differ : individual migration experience favors subsequent local off-farm work, whereas at the family level, migration drives the left-behinds to farming rather than to off-farm activities. Our results also point to the interplay of various channels through which migration influences rural employment patterns.
    Keywords: labor migration; labor supply; remittances; temporary migration; left-behind; China
    Date: 2012–10–23
  16. By: Gemechu, Eskinder D.; Butnar, Isabela; Llop Llop, Maria; Castells i Piqué, Francesc
    Abstract: CO2 emissions induced by human activities are the major cause of climate change; hence, strong environmental policy that limits the growing dependence on fossil fuel is indispensable. Tradable permits and environmental taxes are the usual tools used in CO2 reduction strategies. Such economic tools provide incentives to polluting industries to reduce their emissions through market signals. The aim of this work is to investigate the direct and indirect effects of an environmental tax on Spanish products and services. We apply an environmentally extended input-output (EIO) model to identify CO2 emission intensities of products and services and, accordingly, we estimate the tax proportional to these intensities. The short-term price effects are analyzed using an input-output price model. The effect of tax introduction on consumption prices and its influence on consumers’ welfare are determined. We also quantify the environmental impacts of such taxation in terms of the reduction in CO2 emissions. The results, based on the Spanish economy for the year 2007, show that sectors with relatively poor environmental profile are subjected to high environmental tax rates. And consequently, applying a CO2 tax on these sectors, increases production prices and induces a slight increase in consumer price index and a decrease in private welfare. The revenue from the tax could be used to counter balance the negative effects on social welfare and also to stimulate the increase of renewable energy shares in the most impacting sectors. Finally, our analysis highlights that the environmental and economic goals cannot be met at the same time with the environmental taxation and this shows the necessity of finding other (complementary or alternative) measures to ensure both the economic and ecological efficiencies. Keywords: CO2 emissions; environmental tax; input-output model, effects of environmental taxation.
    Keywords: Emissions atmosfèriques, Anhídrid carbònic, Medi ambient -- Impostos, Anàlisi d'entrada/sortida, 336 - Finances. Banca. Moneda. Borsa, 504 - Ciències del medi ambient,
    Date: 2012
  17. By: Tabuga, Aubrey D.; Reyes, Celia M.; Asis, Ronina D.; Datu, Maria Blesila G.
    Abstract: Poverty incidence in the Philippines is rising based on the national official data released by the National Statistical Coordination Board. Poverty incidence among population rose from 24.9 percent in 2003 to 26.4 percent in 2006 and then inched up further to 26.5 percent in 2009. This is in reverse of the downward trend and is a major deviation from the path toward achieving the Millennium Development Goals. The disparities across the regions remain wide both in terms of poverty and inequality measures. In this paper, we show the salient features of the country`s poverty situation in a hope to contribute to the existing knowledge about the poverty condition and to the formulation of better strategies for reducing poverty. It focuses on agriculture because it plays a central role in the poverty condition that continues to persist despite recent episodes of high economic progress the country has achieved.
    Keywords: inequality, Philippines, Philippine poverty profile, agricultural poverty, multidimensional poverty
    Date: 2012
  18. By: Kirk Doran (Department of Economics, University of Notre Dame)
    Abstract: Do employers substitute adults for children, or do they treat them as complements? Using data from a Mexican schooling experiment, I find that decreasing child farm work is accompanied by increasing adult labor demand. This increase was not caused by treatment money reaching farm employers: there were no significant increases in harvest prices and quantities, non-labor inputs, or non-farm labor supply. Furthermore, coordinated movements in price and quantity can distinguish this increase in demand from changes in supply induced by the treatment's income effects. Thus, declining child supply caused increasing adult demand: employers substituted adults for children.
    Date: 2012–08
  19. By: Richard Jensen (Department of Economics, University of Notre Dame)
    Abstract: Maximizing the production of ecosystem services is a necessity for resource management particularly when increasing the provision of one service decreases the provision of another. In these instances, it is important to estimate the value of ecosystem services to efficiently distribute resources. We estimate two major ecosystem services provided by the Kafue River, Zambia -hydroelectricity and fisheries- and discuss management implications of the relationship between hydropower controlled water regime and fisheries production.
    Keywords: Environmental flows, Multivariate state-space, Fisheries management, ecosystem services, canonical correlation
    JEL: D L
    Date: 2012–07
  20. By: Ciccarelli, Carlo; De Fraja, Gianni
    Abstract: This paper studies the demand for tobacco products in post-unification Italy. We construct a very detailed panel dataset of yearly consumption in the 69 Italian provinces from 1871 to 1913, and use it to estimate the demand for tobacco products. We find support for the Becker and Murphy (1988) rational addiction model. We also find that, in the period considered, tobacco was a normal good in Italy: aggregate tobacco consumption increased with income. Subsequently, we consider separately the four types of products which aggregate tobacco comprises (fine-cut tobacco, snuff, cigars, and cigarettes), and tentatively suggest that habit formation was a stronger factor on the persistence of consumption than physical addiction. The paper ends by showing that the introduction of the Bonsack machine in the early 1890s did not coincide with changes in the structure of the demand for tobacco, suggesting cost driven technological change.
    Keywords: Italian Kingdom; Rational Addiction; Tobacco
    JEL: D11 I18 N33
    Date: 2012–10
  21. By: Gloede, Oliver; Menkhoff, Lukas; Waibel, Hermann
    Abstract: We examine whether the experience of shocks influences individual risk attitude. We measure risk attitude via a simple survey item, compiled among more than 4,000 households in Thailand and Vietnam. The experience of adverse shocks, which is typical for poor and vulnerable households, is related to a higher degree of risk aversion, even when controlled for a large set of socio-demographic variables. Therefore, shocks perpetuate vulnerability to poverty via their effect on risk attitude. We extend this general finding to various categories of shocks and find differences between Thailand and Vietnam. This suggests that risk-coping strategies profit from case-specific design.
    Keywords: Risk attitude, shocks, vulnerability, risk perception, behavior towards risk, Southeast Asia
    JEL: O12 D81 R2
    Date: 2012–10
  22. By: Pandelis Mitsis
    Abstract: The environmental Kuznets curve (EKC) is a relationship across countries between the level of environmental pollution and per capita GDP. This paper investigates the strength of empirical evidence in favour of the existence for an EKC in carbon dioxide emissions, accounting for the model uncertainty created by the numerous candidate regressors proposed in the literature. Using model averaging methods, I find strong evidence in favour of the existence of EKC in carbon dioxide emissions. In contrast, evidence in favour of the significance of many of the additional regressors disappears once model uncertainty is accounted for and robustness is examined. The conclusion reached is that social policy may influence environmental degradation, for which an eventual deterioration is signalled.
    Keywords: Environmental Kuznets Curve; Model uncertainty; Income inequality
    Date: 2012–10

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