Do Richer People Pollute More or Less? New Evidence on Household Level Vehicle Emissions Kuznets Curves

Abstract

Smog is sharply declining in growing cities. This suggests that emissions per mile of driving is declining faster than overall vehicle mileage is growing. This paper analyzes emissions for over 24,000 vehicles tested at random between 1997 and 1999 in California's Random Roadside Emissions Tests. We use these data to test hypotheses concerning whether the rich create more annual vehicle emissions than poorer people. Building on the recent macro Environmental Kuznets Curve literature, we present evidence that vehicle emissions first rise and then decline as a function of household income. We document that three effects underlie this relationship. First, richer people drive more miles than poorer people. Second, richer people own newer vehicles which pollute much less than older vehicles. Third, even controlling for vehicle model year, richer people pollute less. For richer people, the second and third quality effects dominate this first quantity effect. Hence, the rich pollute less.