Abay Mulatu

Income inequality and the environment: aggregation bias in environmental Kuznets curves

Abstract The environmental Kuznets curve assumes an inverted U-shaped relation between environmental damage and per capita income. Recently it has been argued in the literature that in addition to income levels, the inequality in the distribution of power and income is (positively) related to environmental degradation. We provide an additional argument, based on simple aggregation, for including a measure of income dispersion in empirical analyses. When the relationship between environmental damage and household income is concave (e.g. resembles an environmental Kuznets curve), then income inequality is negatively related to total environmental damage. Results from an empirical analysis of cross-national variation indicate that the aggregation effect can run counter to and outweigh the political economy effect for some environmental indicators.

How did the Location of Industry Respond To Falling Transport Costs in Britain Before World War I

This paper explores the location of industry in pre-World-War-I Britain using a model that takes account both of factor endowment and also of new economic geography influences. Broadly speaking, the pattern of industrial location in this period was quite persistent and regional specialization changed little. The econometric results show that factor endowments had much stronger effects than proximity to markets, although the latter was an attraction for industries with large plant size. Overall, falling transport costs had relatively little effect on industrial location at a time when proximity to natural resources, notably coal, mattered most.

Were British Railway Companies Well Managed in the Early Twentieth Century

This paper examines major privately owned British railway companies before the First World War. Quantitative evidence is presented on return on capital employed (ROCE), total factor productivity (TFP) growth, cost inefficiency, and speed of passenger services. There were discrepancies in performance across companies but ROCE and TFP typically fell during our period. Cost inefficiency rose before 1900 but then was brought under control as a profits collapse loomed. Without the discipline of either strong competition or effective regulation, managerial failure was common. This sector is an important qualification to the conventional wisdom that late Victorian Britain did not fail.

Environmental Regulation and Competitiveness: An Exploratory Meta-Analysis

The relationship between domestic environmental regulation and international competitiveness has evoked various speculations. The common neoclassical train of thought is that strict environmental regulation is detrimental to the competitiveness of industry,and that it induces phenomena such as ecological dumping,ecological capital flight,and regulatory `chill’ in environmental standards. A different view is that strict environmental regulation triggers industry’s innovation potential,and subsequently increases its competitiveness. The impact of environmental regulation on competitiveness has been analyzed in terms of international capital movements,new firm formation,and international trade. The paper presents a statistically supported evaluation of the literature,in order to assess what the main conclusions regarding the relationship between environmental regulation and competitiveness are when it comes to studies on international trade flows. The synthesis of the literature is subsequently used to present guidelines for future primary research in this area.

Environmental Regulation and Industry Location

This paper estimates the effect of environmental regulation on industry location and compares it with other determinants of location such as agricultural, education and R&D country characteristics. The analysis is based on a general empirical trade model that captures the interaction between country and industry characteristics in determining industry location. The Johnson-Neyman technique is used to fully explicate the nature of the conditional interactions. The model is applied to data on 16 manufacturing industries from 13 European countries. The empirical results indicate that the pollution haven effect is present and that the relative strength of such an effect is of about the same magnitude as other determinants of industry location. A significant negative effect on industry location is observed only at relatively high levels of industry pollution intensity.

Environmental Regulation and Location of Industrialized Agricultural Production in Europe

This paper analyzes empirically the extent to which environmental regulation influences production location in the pig industry. The analysis is based on a general empirical location model that captures interactions between region and sector characteristics in determining production location, and data on pig production in 43 European regions. We find that while environmental regulation may not have a measurable effect on the E.U. pig industry location per se, it is a strong influence on the sectoral composition of the industry. Relatively highly polluting sectors of the pig industry are attracted to relatively lax jurisdictions, which become pollution havens (hot spots of hog waste). (JEL Q58, R38)