Effects of human inequality and urbanization on ecological well-being performance: A System-GMM analysis

Abstract

Enhancing the efficiency with which ecological consumption is transformed into human well-being is a necessary condition for achieving sustainable development. However, the current literature lacks systematic methods and applications for scientifically assessing Ecological Well-being Performance (EWP). How to value and index EWP is crucial to improve EWP. This study combines the Human Development Index (HDI), Life Satisfaction (LS), and Ecological Footprint (EF) to construct a new Index of Ecological Well-being Performance (IEWP). Meanwhile, human inequality and urbanization are two common and profound socio-economic phenomena with potential impacts on EWP. Therefore, this study uses panel data for 129 countries from 2010 to 2021 and applies the System-GMM approach to explore the impact of human inequality, urbanization, and the interaction between these two factors on EWP. Our results show that EWP has a cumulative effect in the long run. Human inequality has a negative effect on EWP, while the effect of urbanization is positive. Compared to developed countries, the negative impact of human inequality and the positive impact of urbanization are more pronounced in emerging and developing countries. This paper further reveals that the interaction term inhibits EWP, which indicates that urbanization exacerbates the negative effect of human inequality and that human inequality weakens the positive effect of urbanization. This paper contributes to understanding how human inequality and urbanization affect sustainable development from the perspective of EWP.