Preferences, Technology, and the Environment: Understanding the Environmental Kuznets Curve Hypothesis

Posted: 20 Jul 2006

See all articles by Florenz Plassmann

Florenz Plassmann

SUNY at Binghamton, Department of Economics

Neha Khanna

SUNY at Binghamton - Department of Economics

Abstract

We derive a simple expression for the income-pollution path using the standard static model of the environmental Kuznets curve (EKC). This expression makes it straightforward to identify the general characteristics of utility and pollution functions that lead to such a curve. We show that suitable preferences can always lead to an EKC while there is no technology that yields an EKC for all types of preferences, and we derive a sufficient condition for technology that leads to an EKC for almost all types of preferences. Our results hold for a model with multiple goods with different pollution intensities and for a production economy with nonconstant relative price of consumption and environmental effort. We derive our results without assuming specific functional forms and we encompass several other models as special cases.

Suggested Citation

Plassmann, Florenz and Khanna, Neha, Preferences, Technology, and the Environment: Understanding the Environmental Kuznets Curve Hypothesis. American Journal of Agricultural Economics, Vol. 88, No. 3, pp. 632-643, August 2006. Available at SSRN: https://ssrn.com/abstract=918552 or http://dx.doi.org/10.1111/j.1467-8276.2006.00884.x

Florenz Plassmann (Contact Author)

SUNY at Binghamton, Department of Economics ( email )

Binghamton, NY 13902-6000
United States
607-777-4304 (Phone)

Neha Khanna

SUNY at Binghamton - Department of Economics ( email )

Binghamton, NY 13902-6000
United States

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