Urban-rural income gap and air pollution: A stumbling block or stepping stone

Abstract

China is in a critical period of economic transformation currently. However, it is still facing the widening urban-rural income gap and the deterioration of air quality. It not only hinders the construction of urban-rural integration but also restricts the pace of moving from economic growth to high-quality economic development severely. We use PM2.5 concentration to characterize the degree of air pollution and construct a quantile regression model to empirically analyze the urban-rural income gap and air pollution by using Chinese provincial panel data from 2005 to 2018. The main findings are as follows: (1) the urban-rural income gap does not change the shape of the EKC (Environmental Kuznets Curve), but delays the decoupling of economic growth from air pollution. (2) By extending the EKC curve, there is a significant positive U-shaped curve relationship between the urban-rural income gap and air pollution. The urban-rural income gap is a “stumbling block” for air pollution when the urban-rural Thiel index is less than 0.03, but it is a “stepping stone” for air pollution when it exceeds 0.03. Narrowing the urban-rural income gap will enhance the willingness of society as a whole to pay for the environment. (3) The regional heterogeneity results show that the eastern region is consistent with the national regression results. The central region has a positive U-shaped trend, although it is not significant statistically. Western region shows a significant positive linear characteristic.