The Trade-off Between Income Inequality and Carbon Dioxide Emissions

Nicole Grunewald, Stephan Klasen, Inmaculada Martínez-Zarzoso, Inmaculada Martínez-Zarzoso, Chris Muris

Research output: Contribution to journalArticle (Academic Journal)peer-review

213 Citations (Scopus)


© 2017 Elsevier B.V. We investigate the theoretically ambiguous link between income inequality and per capita carbon dioxide emissions using a panel data set that is substantially larger (in both regional and temporal coverage) than those used in the existing literature. Using an arguably superior group fixed effects estimator, we find that the relationship between income inequality and per capita emissions depends on the level of income. We show that for low and middle-income economies, higher income inequality is associated with lower carbon emissions while in upper middle-income and high-income economies, higher income inequality increases per capita emissions. The result is robust to the inclusion of plausible transmission variables.
Original languageEnglish
Pages (from-to)249-256
Number of pages8
JournalEcological Economics
Publication statusPublished - 1 Dec 2017

Structured keywords

  • ECON Econometrics
  • ECON Applied Economics


  • Environmental Quality
  • Income Inequality
  • Panel Data


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