Effect Of Income Growth Research Articles

Rising U.S. Income Inequality and Declining Residential Electricity Consumption: Is There a Link?

Abstract After growing steadily for decades, in the mid-2000s, average US household energy consumption began declining. Using household-level data from the Residential Energy Consumption Survey and Current Population Survey between 1990 and 2020, we decompose overall changes in per-household consumption into three components: a) average income; b) cross-household income distribution; and c) consumption habits, which include energy efficiency. Growth of average income caused consumption to increase by 11 percent, and rising income inequality reduced consumption by 8 percent, nearly entirely offsetting the effect of income growth. Changes in habits also reduced consumption. Back-of-the-envelope calculations indicate an unexpected effect of rising income inequality: climate and air quality improvements valued at $9 billion in 2020 due to lower electricity consumption. The results indicate the importance of coordinating policies that address inequality and pollution.

Framework of New Poverty Decomposition: An Application to the Evolution of Income Distribution

Ending poverty in all its forms is the first of the 17 sustainable development goals (SDGs) of the 2030 Agenda for Sustainable Development. Therefore, it is of great significance to study poverty in the context of sustainable development. At present, the effect of income growth on poverty reduction is becoming less evident, whereas the effect of inhabitant heterogeneity on poverty reduction is becoming increasingly significant in China. Based on the original two-dimensional poverty decomposition of income growth and redistribution, this study introduces the heterogeneity effect to decompose rural poverty in China from three dimensions. It first decomposes the change in income distribution into mean, variance, and residual effects using counterfactual analysis. Then, it introduces the Foster–Greer–Thorbecke index decomposition to decompose China’s rural poverty under the different poverty line. In addition, this paper employs mathematical statistics to analyze the effects of poverty’s growth, dispersion, and heterogeneity. This study finds that the three-dimensional poverty decomposition method can measure the trajectory and trend of poverty more precisely and comprehensively. Moreover, it found that the contradiction between economic growth and poverty regression is due to the fact that the poverty reduction effect of the growth effect and the poverty alleviation effect of the discrete effect have asymmetrical characteristics, whereas the discrete effect and the heterogeneous effect have symmetrical characteristics; that is, the poverty reduction effect of income growth is insufficient to compensate for the poverty deepening effect brought about by the widening income gap, and that the heterogeneous poverty reduction effect plays an increasingly important role. Therefore, to prevent residents from falling back into poverty after being lifted out of it, we must reduce the widening income gap. Moreover, residents’ ability to reduce poverty on their own must be strengthened.

Can agricultural mechanization services narrow the income gap in rural China?

This paper examines the impact of agricultural mechanization services (AMS) on rural household income and income gap, utilizing the recentered influence function regression method and publicly available data collected through the China Labor-force Dynamics Survey. The results of this study shed light on various impacts of AMS. First, agricultural mechanization services can significantly increase rural household income, but there is heterogeneity in the impact on rural household income in different quantiles. The effect of income growth on medium-income and low-income groups is greater. Second, agricultural mechanization services help to narrow the income gap between rural households and alleviate income inequality in rural areas. Third, the effect of agricultural mechanization services on reducing the income gap between rural households in the eastern and western regions is significantly stronger than that in the central region. Finally, further analysis based on income source structure reveals that agricultural mechanization services can significantly reduce the non-agricultural income gap of rural households, but the impact on the agricultural income gap is negligible. Our findings highlight the importance of government's efforts in promoting the development of agricultural mechanization service market in order to improve the income inequality in rural areas.

Modeling the dynamic influences of economic growth and financial development on energy consumption in emerging economies: Insights from dynamic nonlinear approaches

This article evaluates the dynamic impacts of economic growth and financial development on energy consumption in emerging economies from 1998 to 2019. The total financial development and its submeasures of financial institution and financial market development are applied in consideration of the different dimensions of financial development. In doing so, we apply a new dynamic semiparametric additive panel model to address potential dynamicity and nonlinearity. Moreover, the dynamic panel threshold model is recommended to explore the dynamic threshold effect of income growth on energy pressure under different financial development indicators, complementing the gap in the existing research on nonlinear mechanisms regarding this topic. Our findings do not indicate the presence of the EKC hypothesis but verify that income growth can reinforce energy pressure. Total financial improvement and financial market development both display an inverted “U-shaped” nonlinear influence on energy expenditure, while financial institution development can directly ease energy pressure. We also find that financial development performs a significant threshold effect in the linkage between income growth and energy expenditure. The higher the total financial development and financial market development levels are, the stronger the contribution of economic growth on energy pressure; however, the unfavorable influence of economic growth on energy pressure is receded with the increase in financial institution development. Some policy implications are provided for reducing energy poverty through optimizing economic and financial advancement.

Oil rents, economic growth, and CO2 emissions in 13 OPEC member economies: Asymmetry analyses

Oil rents significantly contribute to income in OPEC member economies and could have environmental consequences. The present study explores the asymmetrical effects of oil rents on CO2 emissions in 13 current OPEC economies using a period 1970–2019, and also tests the Environmental Kuznets Curve (EKC) hypothesis. Long-run results show that economic growth has a positive effect, and its square term has a negative effect on CO2 emissions in Algeria, Congo, Gabon, Kuwait, and Saudi Arabia, which validate the EKC in these countries. However, a U-shaped effect of income growth on emissions is substantiated in Angola. Moreover, rising oil rents have positive effects on CO2 emissions in Saudi Arabia, Angola, Congo, Equatorial Guinea, Iran, Iraq, Kuwait, and Libya, and have negative impacts in Algeria, Nigeria, and the UAE. Decreasing oil rents reduce CO2 emissions in Angola, Equatorial Guinea, Libya, and Saudi Arabia, and increase emissions in Algeria. Moreover, asymmetrical effects of oil rents on emissions are found in Angola, Congo, Iran, Iraq, Kuwait, Nigeria, Equatorial Guinea, Saudi Arabia, and the UAE. The short-run results show that the EKC is validated in Algeria, Congo, and Libya. However, economic growth shows a monotonic positive impact on emissions in Nigeria, the UAE, and Venezuela. Increasing oil rents show a positive impact on emissions in Angola, Congo, Iran, and Kuwait and carry a negative impact in Algeria and the UAE. In addition, decreasing oil rents increase CO2 emissions in Algeria, Gabon, Nigeria, and Saudi Arabia. We recommend Angola, Congo, Equatorial Guinea, Iran, Iraq, Kuwait, Libya, and Saudi Arabia to adopt tight environmental policies in times of increasing oil rents to avoid the negative environmental consequences of oil rents.

Analysis of long-term prices of micronutrient-dense and starchy staple foods in developing countries

The continued price increase in food commodities has long been a concern to academia and policymakers because of its substantial impact on poor consumers. Existing literature has concentrated on the cost of micronutrient-dense and starchy staple foods and the price rise in different commodities. Yet, the long-term price growth of micronutrient-dense and starchy staple foods and the price growth gap between micronutrient-dense foods and starchy staple foods have not been given much attention. The paper aimed to estimate the long-term trends in prices and volatility of micronutrient-dense and starchy staples and identify factors that have sustained the growth in prices of food commodities in developing countries. We have used the autoregressive and panel autoregressive distributed lag models to analyse the trends in relative prices and the effects of income growth. The results showed that micronutrient-dense food prices in real terms grew on average by 0.03% per month more than starchy staple food prices, with the expectation of a 12% growth gap in the next 30 years. The volatility of micronutrient-dense food items exceeds starchy staple foods in most domestic markets. Also, the prices of micronutrient-dense foods were more volatile in international markets than in most developing countries. Income growth in developing countries was one of the factors that contributed to the declining relative price of micronutrient-dense food commodities. Other factors, such as the high production of staple foods and their price stabilization policies, may have caused price trends to persist. Policies that enhance price stabilization for micronutrient-dense foods, supplementation, fortification, dietary diversity, and nutrition-sensitive interventions such as biofortification may be adopted in developing countries.

The Nexus among Energy Intensity, Energy Mix and Economic Performance in Europe: A Decomposition Analysis

Using a versatile piecewise linear regression model, this study revisits the connection between energy intensity, energy mix, macroeconomic variables, and economic performance. The analysis determines a threshold effect of income growth on changes in energy intensity based on dynamic panel data for a collection of European economies from 1990 to 2020. The study builds on the three specifications: The Skelton model (M1), the human capital model (M2), and the policy model (M3). The Skelton model is a fundamental model that explains the energy economic relationship with energy use in many economic sectors and with various energies. Additionally, in M2, achieve basic and secondary education as human capital, investment, and commerce as models for policies (M3). Numerous diagnostic procedures are carried out to examine serial correlation, heteroscacity, and cross-sectional dependence. In order to evaluate the robustness of the results, the specification of the dynamic panel is put through the Generalized Method of Movement (GMM) regression framework. Although energy intensity and income growth are negatively correlated for the entire sample and study period, the rate of decline significantly slows after the level of per capita income reaches $5,000, by more than 30%. According to the analysis's findings based on index decomposition, structural change is crucial for intensity levels across all nations. Additionally, moving from fossil fuels to renewable energy sources has a positive correlation with economic success in terms of energy intensity. While increasing energy intensity spurs global growth because of the current state of environmentally friendly technological innovation.

The impact of energy efficiency on carbon emissions: Evidence from the transportation sector in Chinese 30 provinces

• Panel threshold regression model and Tapio model are developed. • Energy efficiency and urbanization have a non-linear inhibitory effects on CO 2 . • Energy efficiency can curb CO 2 more than urbanization. • Income, private car, and cargo turnover have a non-linear promotion effect on CO 2 . • CO 2 from China's transportation sector is in a terrible state of decoupling. Emissions in the transport sector are a rising source of China's carbon emissions. Curbing carbon emissions in the transport sector will be important for China to achieve its carbon peak by 2030 and carbon neutrality by 2060. To better understand the nonlinear effects of carbon emissions in the transport sector, this study investigated carbon emissions caused by the transport sectors of 30 Chinese provinces from 2005 to 2019. It combined the decoupling index with a panel threshold analysis. The results indicate that the inhibitory effect of energy efficiency on carbon emissions in the transportation industry is increasing as energy efficiency improves. Energy efficiency is expressed in terms of the GDP that can be generated by a unit of energy. When energy efficiency is below the threshold value of 0.473 million RMB/ t, carbon emissions are reduced by 0.818% for every 1% increase in energy efficiency. When energy efficiency is higher than the threshold value of 0.473 million RMB/ t, a 1% increase in energy efficiency reduces carbon emissions by 0.926%. The results also show that urbanization curbs carbon emissions from the transportation sector, but the effect of urbanization is lower than the effect of energy efficiency. As the level of urbanization increases, the inhibitory effect of urbanization on carbon emissions ranges from -0.658 to -0.743. Income growth, private cars, and cargo turnover play a nonlinear role in promoting carbon emissions. Studies have shown that carbon emissions in China's transportation sector are generally in three poor decoupling states: strong negative decoupling, declining decoupling, and expansive negative decoupling. This suggests that the inhibitory effect of energy efficiency and urbanization on carbon emissions is less than the promoting effect of income growth, private vehicles, and cargo turnover. To develop more effective policies to curb carbon emissions in the transport sector, the nonlinear effects driving carbon emissions should be carefully considered.

Does the digital finance revolution validate the Environmental Kuznets Curve? Empirical findings from China.

In recent years, digital finance has become a crucial part of the financial system and reshaped the mode of green finance in China. Digital finance has brought certain impact on economic growth, industrial structure, and resident income, which may affect pollution. The nexus of digital finance and environment in China is thus worth exploring. By revising the traditional Environmental Kuznets Curve model with income inequality variable, this paper decomposes the environmental effects of economic activities into income growth effect, industrial structure effect and income inequality effect, and use panel data of China’s provinces to conduct an empirical analysis. The results reveal the following: (1) the Environmental Kuznets Curve is still valid in sample, and digital finance can reduce air and water pollution (as measured through SO2 and COD emission) directly; (2) in the influence mechanism, digital finance can alleviate income inequality and promote green industrial structure, thus reducing pollution indirectly, but the scale effect of income growth outweighs the technological effect, which increases pollution indirectly; and (3) digital finance has a threshold effect on improving the environment, then an acceleration effect appears after a certain threshold value. From the regional perspective, digital finance development in eastern regions is generally ahead of central and western regions, and the effects of environmental improvement in the eastern regions are greater. According to the study, this paper suggest that digital finance can be an effective way to promote social sustainability by alleviating income inequality and environmental sustainability by reducing pollution.

Impact of tobacco price and taxation on affordability and consumption of tobacco products in the South-East Asia Region: A systematic review.

INTRODUCTIONThe objective of the review was to study the impact of tobacco taxes or prices on affordability and/or consumption of tobacco products in WHO South-East Asia Region (SEAR) countries, overall and by socioeconomic status; and change in consumption of one tobacco product for a given change in price/tax on another tobacco product.METHODSThe searches were made in five databases (Medline, Embase, Cinahl, EconLit, Tobacconomics) using keywords such as ‘tobacco’, ‘tax’, ‘price’, ‘impact’ with their synonyms. Additionally, the first 100 articles through google search and e-reports from targeted sources were also reviewed. Studies illustrating the impact of prices/taxes on consumption/affordability of tobacco products in SEAR, in English and with no limitation on year, were included in the review. After two steps of screening, data from 28 studies were extracted using a structured and pre-tested data extraction form.RESULTSOf the 28 studies, 12 studies reported an inverse association between price and consumption/affordability, while 11 studies reported no or positive association between price and consumption/affordability of tobacco products. Five studies had unclear interpretations. The majority of studies estimated that the less affluent group were more price responsive compared to the more affluent group. Some studies indicated increased consumption of one product in response to price rise of another product, although, the findings were inconsistent.CONCLUSIONSThe findings of our review support the use of tobacco tax and price measures as effective tools to address the tobacco epidemic. Our findings, however, also emphasize the importance of increasing tobacco product taxes and prices sufficiently to outweigh the effects of income growth, in order for the measures to be effective in reducing the affordability and consumption of tobacco products.

Towards mitigating ecological degradation in G-7 countries: accounting for economic effect dynamics, renewable energy consumption, and innovation

The 21st century economic growth is characterized by extensive production and consumption, which increases anthropogenic emissions. However, reducing emission levels require ecological sustainability through innovation and modern technological consideration. This paper investigated not only renewable energy-driven environmental quality but also captured innovation research investment in renewables within the framework of the environmental Kuznets curve (EKC) model for G-7 countries. The findings confirmed the presence of EKC hypothesis for G-7 countries. In addition, renewable energy and innovation were identified to exert negative effects on ecological footprint. To capture the entire conditional distribution of the ecological footprint, we applied the Method of Moments Quantile Regression with fixed-effects. The results affirmed the negative effects of renewable energy innovation. Besides, their effects were heterogeneous across the quantiles with evidence of diminishing effects from lower to higher quantiles, suggesting that countries with lower levels of ecological footprint are possibly more prone to the environmental deterioration effect of income growth. The results of the causality test support economic growth-induced ecological degradation, growth-induced renewables, and innovation-induced ecological conservation. The results further showed a feedback effect between renewables and ecological footprint, innovation, and income growth as well as innovation and renewables. These findings portend important implications for the realization of carbon-free economies in G-7 countries by 2100.

Poverty Changes in Tanzania: An Assessment of Income Growth, Inequality and Population Shifts in Kagera, 1991–2010

This study decomposes the Kagera headcount poverty index into effects of income growth, income inequality, and population shifts. In the literature, the decomposition of poverty into growth and inequality components—which began with Kuznets (1955)—is continuing, with the results still being inconclusive. Later analyses have also incorporated the effects of population shifts into the poverty dynamics, as migrants ordinarily benefit from new avenues of reducing poverty, which however are not without negative effects. Using the Kagera Health and Development Survey (KDHS) data, the paper uses Son’s (2003) approach to decompose poverty in Kagera Region into income growth, inequality, and population shifts. The results show that growth leads to poverty reduction; population shifts tend to have mixed results depending on how the data are partitioned; whereas inequality effects were found to change with the base year. The findings imply that policies geared at reducing poverty should not be divorced from location-specific situations.

Exploring the impact of temperature change on residential electricity consumption in China: The ‘crowding-out’ effect of income growth

Under the background of global warming, the world is experiencing many extreme climate events. The temperature fluctuation associated with climate change is often considered as a primary driving force of electricity consumption. To better explore the impact of temperature on electricity consumption, this paper aims to analyze the question from the perspective of income growth, i.e., the moderating effect of income growth on the response of urban residential electricity to temperature changes. Using the unbalanced panel data of 23 cities in the Yangtze River Delta Urban Agglomeration from 2004 to 2015, we construct the response model of residential electricity consumption to income growth, heating degree days, cooling degree days and their interactions. The results show that heating demand, cooling demand and income growth significantly increase residential energy consumption. However, urban residential disposable income growth weakens the positive effect of heating demand and cooling demand on residential electricity consumption. Because, urban residents have obvious demand for improving indoor heating comfort and cooling comfort, the moderating effect of income is shown as the crowding-out effect. Residents may adjust the structure of heating energy consumption (from electricity to natural gas) and upgrade their electrical equipment to high energy efficiency equipment, thereby reducing residential electricity consumption. This study also indicates that urban residential energy consumption is very sensitive to changes in permanent populations. The main contribution of this study is proposing the hypothesis of the negative moderating effect of income growth on temperature changes and expanding the response model of residential electricity consumption to temperature changes. Finally, this paper also proposes the adaptive strategies and policy implications for climate change.

The carbon dioxide emissions effect of income growth, electricity consumption and electricity power crisis

PurposeAttaining higher economic growth and development is among the topmost agenda for many countries. However, the process to attain such growth and development involves higher level of energy consumption and that may not spare the quality of the environment. A similar concern has been raised for Ghana as it aims to attain an upper middle-income status in the near future. The country's energy sector has however not been robust in meeting the electricity demand, leading to a recurrent power crisis. The study seeks to analyze the effect of income growth, electricity consumption and power crisis on Ghana's carbon dioxide (CO2) emissions.Design/methodology/approachThe paper relies on annual time series data from the World Bank (2020) and employs the autoregressive distributed lag (ARDL) and fully modified ordinary least square (FMOLS) estimation techniques for regression analysis.FindingsThe results showed that the environmental Kuznets curve (EKC) hypothesis is valid for Ghana in the case of carbon emissions. Also, while electricity consumption has an insignificant effect on carbon emissions, electricity power crisis exerts a positive effect on emission of CO2. It was also noted that industrialization and financial development increase CO2 emissions.Research limitations/implicationsPolicy implications from the study include the EKC hypothesis can be a sound basis for environmental policy in Ghana. Other recommendations and areas for future research have been provided.Originality/valueThe study empirically estimates the effect of electricity crisis on CO2 emissions.

Direct Rebound Effect for Electricity Consumption of Urban Residents in China Based on the Spatial Spillover Effect

Based on methods of price decomposition and spatial econometrics, this paper improves the model for calculating the direct energy rebound effect employing the panel data of China’s urban residents’ electricity consumption for an empirical analysis. Results show that the global spatial correlation of urban residents’ electricity consumption has a significant positive value. The direct rebound effect and its spillover effects are 37% and 13%, respectively. Due to the spatial spillover effects, the realization of energy-saving targets in the local region depends on the implementation effect of energy efficiency policies in the surrounding areas. However, the spatial spillover effect is low, and the direct rebound effect induced by the local region is still the dominant factor affecting the implementation of energy efficiency. The direct rebound effect for urban residents’ electricity consumption eliminating the spatial spillover effect does not show a significant downward trend. The main reason is that the rapid urbanization process at the current stage has caused a rigid residents’ electricity demand and large-scale marginal consumer groups, which offsets the inhibition effect of income growth on the direct rebound effect.

The Impact of Income and Taxation in a Price-Tiered Cigarette Market: findings from the ITC Bangladesh Surveys

BackgroundTaxing tobacco is among the most effective measures of tobacco control. However, in a tiered market structure where multiple tiers of taxes coexist, the anticipated impact of tobacco taxes on...

Trend in the affordability of tobacco products in Bangladesh: findings from the ITC Bangladesh Surveys

BackgroundThe price of tobacco products in relation to the income of tobacco users—affordability—is recognised as a key determinant of tobacco use behaviour. The effectiveness of a price increase as a...

The relationship between energy intensity and economic growth: New evidence from a multi-country multi-sectorial dataset

This paper revisits the relationship between energy intensity and economic growth, using a flexible piecewise linear regression model. Based on a panel data set of 137 economies during 1990-2014, the analysis identifies a threshold effect of income growth on energy intensity change: although energy intensity is negatively correlated with income growth throughout the entire sample and study period, the declining rate significantly slows by more than 30 percent after the level of per capita income reaches $5,000. Based on index decomposition, the analysis also finds that although structural change is important for intensity levels in all countries, the efficiency effect is more important in higher-income countries. The results suggest that when countries move beyond lower-middle-income levels, energy efficiency policies become far more critical for sustaining the rate of improvement in energy efficiency.

THE GROWTH OF WORLD TRADE: THE ROBUSTNESS OF THE EVIDENCE

In this work we revisit the seminal paper “The growth of world trade: tariffs, transport costs, and income similarity” by S. Baier and J. Bergstrand published in the Journal of International Economics (2001). We develop a rigorous econometric analysis of the robustness of their results. While our findings support Baier and Bergstrand 2001’s general conclusions, we provide refined evidence of the results. Under robust estimators, we show that the presence of outliers overestimated the effect of trade liberalization and underestimated the effect of income growth, as sources of world trade growth in the second half of the past century.

Government guaranteed small business loans and regional growth

This paper examines the impact of government guaranteed small business loans on regional growth. I construct a metro-level panel of the Small Business Administration's guaranteed loans and examine economic growth between 1993 and 2002, across 316 metro areas in the US. A simple OLS regression finds a significant positive relationship between small business loans and regional growth. However, first-difference and instrumental variable regressions that mitigate endogeneity find no significant employment or income growth effects from small business loans. At least from an efficiency perspective, there seems to be no net gains to the regional economy from guaranteed small business loans.