Capita Income Increases Research Articles

High-income does not protect against hurricane losses

Damage due to tropical cyclones accounts for more than 50% of all meteorologically-induced economic losses worldwide. Their nominal impact is projected to increase substantially as the exposed population grows, per capita income increases, and anthropogenic climate change manifests. So far, historical losses due to tropical cyclones have been found to increase less than linearly with a nation’s affected gross domestic product (GDP). Here we show that for the United States this scaling is caused by a sub-linear increase with affected population while relative losses scale super-linearly with per capita income. The finding is robust across a multitude of empirically derived damage models that link the storm’s wind speed, exposed population, and per capita GDP to reported losses. The separation of both socio-economic predictors strongly affects the projection of potential future hurricane losses. Separating the effects of growth in population and per-capita income, per hurricane losses with respect to national GDP are projected to triple by the end of the century under unmitigated climate change, while they are estimated to decrease slightly without the separation.

Comment on “Metallic Mineral Resources in the Twenty-First Century: I. Historical Extraction Trends and Expected Demand” by Alberto E. Patino Douce, in Natural Resources Research DOI: 10.1007/s11053-015-9266-z

We agree with the author that metal consumption cannot be described as a logistic function of time, but disagree that we ever said it should be so modeled. Whether one uses a linear or a logistic function, direct use of time as a predictor of metal consumption does not make sense and provides little confidence in the predictions. The main purpose of this paper was to generate estimates of likely future demand of metallic raw materials. Many studies show that metal consumption per capita is well predicted by GDP per capita because consumption has been shown to increase with increasing income, but levels off, or even declines with high income (Radetzki and Tilton 1990; Menzie et al. 2005; Singer and Menzie 2009, 2010; Jaunky 2012; Puchkov 2005). Thus, a short-term linear function of global consumption might seem to be a good predictor, but it ignores the leveling off or decline in consumption that occurs in the long term as per capita income increases. A logistic function of per capita national metal consumption based on GDP per capita is desirable for predicting long-term consumption. There is persuasive evidence that per capita consumption of minerals levels off with higher per capita income, which is significant if one attempts to predict future demand of minerals.

A Meta‐analysis of Food Demand Elasticities for China

AbstractWe conducted a meta‐analysis of food and agricultural demand elasticities for China, and used the results to derive estimates of income, own‐price, and cross‐price elasticities of demand that can be used in models of food and agricultural markets. Consistent with expectations, we find that income elasticities of demand for many food products decline as per capita income increases. The declines are relatively large for alcohol and tobacco, and smaller for livestock products. Contrary to expectations, own‐price elasticities for some products become more price‐elastic as per capita income increases. One explanation may be that economic development brings with it improvements in food supply chains that provide people more choices with respect to food products than those traditionally consumed in rural villages, leading to greater substitution possibilities and more price‐elastic demands. Estimates for 2011 of income and own‐price demand elasticities are generally reasonable, whereas deriving reliable estimates of cross‐price elasticities is difficult. The estimates suggest that China's meat and dairy demands, and in turn livestock feed demands, will continue growing strongly. Policy‐makers should continue to monitor the evolution of demand for these products with an eye toward ensuring food security, particularly given the sheer size of the population and relatively tight domestic food supply situation in China.

A mecânica da instabilidade de regime na américa latina

Este artigo aborda estritamente um único enigma: por que os países que tentaram instaurar uma democracia mais cedo a vivenciaram com menor frequência? As dinâmicas de regime são impulsionadas por dois mecanismos: (1) as democracias se tornam mais duráveis à medida que aumenta a renda per capita; e (2) experiências anteriores com a democracia desestabilizam tanto democracias quanto autocracias. Assim, países que experimentam uma democracia com níveis de renda mais baixos vivenciam maior instabilidade de regime. Além disso, até atingirem um limite mínimo de renda, em qualquer momento há uma probabilidade menor de esses países serem democráticos do que a de países que vivenciam uma democracia pela primeira vez quando sua renda é mais elevada. Portanto, paradoxalmente, a resistência das monarquias europeias contra a democracia resultou em democracias mais estáveis do que as que se seguiram a tentativas pós-independência na América Latina.

The determinants of household energy demand in rural Beijing: Can environmentally friendly technologies be effective?

With the recent rapid economic growth, total energy demand in rural China has increased dramatically, and the energy structure is in the transition from non-commercial to commercial sources. Simultaneously, it is expected that households in rural areas will face energy shortages and additional environmental problems unless they have more access to renewable energy technologies. However, little is known about (i) the transition of energy use patterns and (ii) whether introduced technologies have been effective. To analyze these issues, we estimated the energy demands of rural households by using survey data taken from Beijing's ten suburban districts. The data contain information on both non-commercial and commercial energy use, key characteristics of the households and several renewable energy technologies. Our empirical analysis yielded three main results. First, the per capita income is a key factor in the per capita energy consumption. More specifically, the marginal increase (or marginal change) in per capita coal consumption strongly diminishes (or declines) as per capita income increases. Second, coal and liquefied petroleum gas (LPG) prices do not exhibit substitution effects, but an increase in these prices has strong negative effects on the use of these energy resources. Third, renewable energy technologies are identified to reduce coal consumption and to improve energy efficiency. Overall, these findings suggest a positive perspective: if the Chinese government were to design appropriate policies associated with renewable energy technologies and related energy prices, then coal consumption can be reduced in the near future, and the substitution to cleaner energy use will accelerate. Therefore, a smooth energy transition in rural China could be made in a more environmentally sustainable manner.

The effects of corruption control, political stability and economic growth on deforestation-induced carbon dioxide emissions

AbstractThis article formulates an empirical model that measures the short- and long-run effects of political stability, corruption control and economic growth on CO2 emissions from deforestation. Political stability and corruption have significant effects on forest cover in the short run and have lingering long-run effects. We derive a U-shaped forest–income curve where forest cover initially declines as per capita income increases, but starts to rise after an income turning point. Political stability and corruption control do not significantly affect the income turning point but both variables shift the forest–income curve up or down. The resulting CO2 emission–income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions–income curve, leading to smaller changes of CO2 emissions per unit change in income.

Environmental quality and economic growth: Searching for environmental Kuznets curves for air and water pollutants in Africa

This study investigated the relationship between per capita income and environmental degradation in Africa, using longitudinal data on suspended particulate matter and organic water pollutants. The specific objective was to estimate environmental Kuznets curves for two indicators of environmental quality and to establish whether the estimated relationships conform to the inverted U-shape hypothesis. The results of the empirical investigation generally suggest the existence of an environmental Kuznets curve for suspended particulate matter. In the case of organic water pollutants, the evidence weighs more in favor of rising pollution as per capita income increases. The turning point levels of income established for the two indicators of environmental quality were however generally low, when compared to evidence from existing studies. On the face value, this suggests that African countries may be turning the corner of the environmental Kuznets curve, much faster, and at lower levels of income, much in line with the emerging idea of a “revised environmental Kuznets curve”. The results also suggest that economic growth and rising incomes may matter in African countries in order to curb pollution from these pollutants, but more stringent policy measures, particularly at the industrial level would be required to curb environmental degradation from organic water pollutants.

Governmental influence on unreserved fund balances for Mississippi counties

This research examines the relative influences of different forms of government on local governments' financial management. Specifically, it seeks to determine whether or not the impact of financial and environmental factors on the unreserved fund balance differs between an administrative form of government, such as the Unit system, and a political form of government, such as the Beat system of county governments in Mississippi. The purpose of this study is to explain further why governments maintain far more savings than are the recommended benchmarks. The findings suggest that savings behave differently under different financial environments. During times of resource abundance, Beat systems increase savings as per capita income, property tax, and other revenues increase. Beat systems decrease savings as the population, debt per capita, and intergovernmental revenues increase. Unit systems, however, increase savings as property tax, intergovernmental and other revenues increase, but decrease savings as per capita income, population, and debt per capita increase. During times of resource scarcity, majority-non-white counties spent savings at a much slower rate than did the majority-white counties.

The sources of the Kuznets relationship between road fatalities and economic growth

This paper reports the results of an empirical analysis of the Kuznets curve relationship between per capita income and road fatalities across 60 countries over the period 1972–2004. This relationship hypothesizes that the number of road fatalities increases with increasing motorization in the early stages of economic growth. Eventually, due to advances in technical, policy and political institutions, it declines as per capita income increases. The quality of political institutions as well as improvements in medical care and technology are hypothesized to impact road fatalities. Results indicate evidence of a Kuznets curve relationship between per capita income and road fatalities for both highly developed and less developed countries and support our hypothesis that changes in institutional quality and medical improvements underlie the Kuznets relationship. The evidence presented in this study suggests that lowering corruption levels as well as improvements in medical care and technology would help to reduce road fatalities.

The Mechanics of Regime Instability in Latin America

The paper is narrowly addressed to a single puzzle: How did it happen that countries that attempted to install democracy earlier enjoyed it less frequently? Regime dynamics are driven by two mechanisms: (1) Democracies become more durable as per capita income increases, and (2) Past experiences with democracy destabilize both democracies and autocracies. As a result, countries that experiment with democracy at lower income levels experience more regime instability. Moreover, until they reach some income threshold, at any time such countries are less likely to be democratic than countries that first enter democracy when they have higher incomes. Hence, paradoxically, the resistance of European monarchies against democracy resulted in democracies that were more stable than those following post-independence attempts in Latin America.

An analysis of the profitability and choice of metropolitan waste-use in urban agriculture of the Federal Capital Territory, Abuja, Nigeria

The study attempts to analyse the profitability of urban agriculture using metropolitan organic waste in Abuja, the Federal Capital Territory of Nigeria. The results show that the enterprise is profitable, and that output price is the most important determinant of the maximum variable profit. Other price factors, specifically planting materials, labour, and metropolitan waste (organic manure), account for less. Further analysis shows that level of education, age of farmers, per capita farm income, and household size are important determinants of choice of urban agriculture for food security and improvement of environmental quality. The chances of farmers willing to pay for urban agriculture will increase when their level of education and per capita income increase, while the chances of not willing to pay for such venture will increase when their ages and household size increase. The creation of more market outlets for urban produced foods is recommended, among others.

Determinants Of Profitability And Willingness To Pay For Metropolitan Waste-Use In Urban Agriculture Of The Federal Capital Territory, Abuja, Nigeria

The study attempts to analyse the profitability of urban agriculture using metropolitan organic waste in Abuja, the Federal Capital Territory of Nigeria. The results show that the enterprise is profitable, and that output price is the most important determinant of maximum variable profit. Other price factors, specifically planting materials, labour, and metropolitan waste (organic manure) were not significant. Further analysis shows that level of education, age of farmers, per capita farm income, and household size are important determinants of choice of urban agriculture for food security and improvement of environmental quality. The chances of farmers willing to pay for urban agriculture will increase when their level of education and per capita income increase, while the chances of not willing to pay for such venture will increase when their ages and household size increase. The creation of more market outlets for urban produced foods is recommended, among others. Agro-Science Vol. 7 (1) 2008: pp. 41-46

Urbanization in Southeast Asia: Assessing Policy Process and Progress toward Sustainability

In investigating the relationship between urbanization and sustainability in cities of developing countries, many researchers have looked to rising incomes as a driver for environmental improvement. This article challenges the transition and evolutionary models of urban environmental development that suggest that as cities grow in per capita income, their local environmental problems will diminish. The transition model is outcomes‐based, and a competing model based on greater attention to participation in setting sustainability goals and assessing the progress toward those goals is presented.Consensus on appropriate sustainability indicators is a key element, albeit a challenging one, in the task of pursuing urban sustainability. This is due to the contested nature of the concept of sustainability and also the fact that much of the work done on sustainability has been conducted among countries or on a national scale. A brief review of health, urban transport, air quality, and sewerage indicators suggests that cities do not necessarily see more progress as the per capita income increases. Low‐income cities in Southeast Asia that are performing well are likely to see a deterioration in standards with rapid economic and population growth.

Income growth and atmospheric pollution in Spain: An input–output approach

The relationships between economic growth and environmental pressures are complex. Since the early nineties, the debate on these relationships has been strongly influenced by the Environmental Kuznets Curve hypothesis, which states that during the first stage of economic development environmental pressures increase as per capita income increases, but once a critical turning point has been reached these pressures diminish as income levels continue to increase. However, to date such a delinking between economic growth and emission levels has not happened for most atmospheric pollutants in Spain. The aim of this paper is to analyse the relationship between income growth and nine atmospheric pollutants in Spain. In order to obtain empirical outcomes for this analysis, we adopt an input–output approach and use NAMEA data for the nine pollutants. First, we undertake a structural decomposition analysis for the period 1995–2000 to estimate the contribution of various factors to changes in the levels of atmospheric emissions. And second, we estimate the emissions associated with the consumption patterns of different groups of households classified according to their level of expenditure.

Comment on “Labor Mobility and East Asian Integration”

Chia (2006) covers a full range of issues related to the international labor mobility (ILM) that is taking place in East Asia. The paper successfully reminds us that this phenomenon carries a history, and that it is activated by both classic and emerging factors. Chia introduces some approaches for orderly ILM that are being taken by various levels of international and regional institutions. The World Trade Organization, Asia–Pacific Economic Cooperation, and many regional trading arrangements (RTAs) have some clauses on ILM in agreements they have concluded, although most of them touch upon only cross-border flows of professional and skilled workers. Chia spells out various types of measures to further regional ILM and succeeds in identifying the capability of regional cooperation frameworks to affect the direction and magnitude of ILM in East Asia. The effectiveness of regional cooperation frameworks in affecting semiskilled ILM is pronounced in the case of the draft versions of Japan's RTAs with the Philippines and Thailand. The latest drafts of the two agreements incorporate the “movement of natural persons” as a “major element,” and address not only professional and skilled workers, but also semiskilled workers. The draft agreement with the Philippines refers to nurses and certified care workers, whereas the draft with Thailand touches upon Thai cooks and care workers. This policy change is truly remarkable in the sense that previously Japan had not shown any interest in the introduction of foreign semiskilled workers. It seems that the package deal approach of an RTA helps such a drastic policy change be realized, although Japan has not yet concluded bilateral agreements on the introduction of foreign unskilled or semiskilled workers with any countries. However, once the “movement of natural persons” is juxtaposed with other fundamental issues in an RTA, the costs and benefits accrued from all the issues appear to be smoothed out. The introduction of semiskilled workers to Japan might become more acceptable to the Japanese when the benefits accruing from liberalization in other issues in the RTA are taken into account. In this way, the framework of regional cooperation is surely facilitating ILM of not only professional and skilled workers, but also semiskilled workers into Japan. Another focal issue raised by Chia is the linkage between ILM and investment. Chia cites Tsai and Tsay (2004) and argues that there are a series of stages of development with different combinations of flows in ILM and foreign direct investment as shown in the first two columns of Table 1. Tsai and Tsay (2004) found that there is a tendency of low-income countries to import capital and to export labor, and that as per capita income increases, this tendency becomes less pronounced. Finally, when a country becomes richer, the country is more likely to export capital and to import labor. Chia interprets this evolution of combination of flows in ILM and foreign direct investment from the view point of the substitutable and/or complementary natures of labor and capital. Here, I propose an alternative interpretation. Assume a model with one product, two factors (labor and capital), and many countries where per capita income is positively correlated with the capital–labor ratio. Thus, a high-income country exhibits a high capital–labor ratio. In addition, assume the product is freely traded internationally, and international markets for labor (L) and capital (K) are completely liberalized. Consequently, the relative factor price will be equalized, and so is the capital–labor ratio (K/L). Without loss of generality, assume that the equilibrium capital–labor ratio is close to that of the middle income countries (K/L)M. Then, in the transition toward the equilibrium capital–labor ratio, the ratio of a high-income country declines whereas that of a low-income country rises. As a result, the pattern of factor movements along with economic development in Table 1 is reproduced. In other words, the pattern of factor movements might be a process of mean convergence in capital–labor ratios.

Diet shifts towards meat and the effects on cereal use: can we feed the animals in 2030?

The paper argues that current international projections of meat and feed demand may underestimate future consumption patterns, for mainly two reasons: demand projections are based on income extrapolation with an assumed demand elasticity and feed requirements per unit of meat are taken to be fixed. Instead, we propose a structural specification that includes a dietary shift towards meat as per capita income increases, and we account for a shift from traditional to cereal intensive feeding technologies. Our finding is that under the commonly assumed growth rates of per capita income, world cereal feed demand will be significantly higher in the coming 30 years than is currently projected by international organizations, even if we allow for price effects. Compared to other factors that are generally expected to affect the future world food situation, the quantitative impact of the increased cereal feed demand greatly exceeds that of GMOs and climate change in the coming three decades.

Projection of energy-intensive material production for bottom–up scenario building

The production growth of energy-intensive commodities in physical terms is an important component of bottom–up emission scenarios and a relevant national circumstance to be incorporated in schemes for differentiating greenhouse gas emission allowances. In this study, average future growth rates of physical production are estimated for various branches of the energy-intensive industry in a wide range of countries. To this end, historic patterns of growth were analysed on a per capita basis from the 1980s onwards. Per capita production levels of steel, cement, and refinery products tend to level off for all countries as per capita income increases. These stabilisation levels, however, differ by a factor of 10 from country to country. Petrochemical and total paper and board production per capita, on the contrary, keeps on increasing with increasing income, and per capita aluminium production shows a rather weak relationship to income. Aggregated annual growth of physical production of energy-intensive commodities in this time period amounted to 5.9% in low, 1.1% in middle, and 0.8% in high-income countries. Assuming that a country experiences declining growth rates of physical production as its income increases, these aggregated figures may be used to estimate future growth rates. Projections thus based on recent growth trends suggest that earlier estimates may be improved.

Death Sentence Rates and County Demographics: An Empirical Study

Why do black defendant-black victim cases receive by far the lowest rate of death sentences? One hypothesis is that prosecutors devalue black victims' lives and do not regard black-victim murders as seriously as white victim murders. A second hypothesis, one that need not preclude the first, posits that black communities' aversion to the death penalty leads prosecutors to seek it less, or juries to impose it less, in minority communities. The first view represents a version of old-fashioned stereotypical racism. The second hypothesis could be regarded as democracy at work. Communities more hostile to the death penalty elect officials and process criminal cases in a manner that reflects local community values. This Article finds that, in addition to the number of murders, three other demographic factors influence the death sentence rate at the county level. The rate of death sentences decreases as a county's black population percent increases, as a county's per capita income increases, and as a county's homicide rate increases.

From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?*

We model demographic and economic long‐run development in a setting where mortality is endogenous and subject to epidemic shocks. The model replicates the full transition from Malthusian stagnation to modern growth. Consistent with the historical facts, the economy also passes an intermediate post‐Malthusian phase where growth rates of both population and per capita income increase simultaneously, as mortality rates fall and become less volatile. The escape from the Malthusian trap is the result of a series of mild epidemic shocks, making it inevitable at some stage, but its timing random. Calibrations show that it can differ by thousands of generations, absent differences in exogenous parameters.

Inequality and Economic Growth: A Global View Based on Measures of Pay

This paper discusses two issues in the relationship between inequality and economic growth: the data and the econometrics. We first review the income inequality data set of Deininger and Squire (D&S), which, we argue, fails to provide either adequate or accurate coverage, whether through time or across countries. We then introduce our own measures of the inequality of manufacturing pay, based on UNIDO's Industrial Statistics. These provide indicators of pay inequality that are more stable, more reliable and in our view also more comparable across countries, than the D&S data. Turning to the fabled “Kuznets” relationship between inequality and economic development, we diagnose several common econometric problems in the literature, including measurement error and omitted variable bias. By taking steps to account for these problems, and by introducing a more complete panel data set based on pay inequalities, we seek more reliable inferences concerning the relationship between inequality, national income and economic growth. We find evidence that generally supports Kuznets' specification for industrializing countries: pay inequality tends to decline as per capita income increases, though with some tendency for the relationship to curve up for the richest countries. After 1981 two findings emerge. First, per capita GDP growth slowed dramatically in most countries, increasing inequality along the augmented Kuznets curve. Second, there is a global and macroeconomic effect that produces rising inequality in our data, independent of GDP or its changes. The timing of this effect suggests a link to the high real interest rates and global debt crisis of the period beginning in 1982. (JEL C23, D31, J31, O11 )