Antonio Musolesi

A panel data heterogeneous Bayesian estimation of environmental Kuznets curves for CO2 emissions

This article investigates the Environmental Kuznets Curves (EKC) for CO2 emissions in a panel of 109 countries during the period 1959 to 2001. The length of the series makes the application of a heterogeneous estimator suitable from an econometric point of view. The results, based on the hierarchical Bayes estimator, show that different EKC dynamics are associated with the different sub-samples of countries considered. On average, more industrialized countries show evidence of EKC in quadratic specifications, which nevertheless are probably evolving into an N-shape based on their cubic specification. Nevertheless, it is worth noting that the EU, and not the Umbrella Group led by US, has been driving currently observed EKC-like shapes. The latter is associated to monotonic income–CO2 dynamics. The EU shows a clear EKC shape. Evidence for less-developed countries consistently shows that CO2 emissions rise positively with income, though there are some signs of an EKC. Analyses of future performance, nevertheless, favour quadratic specifications, thus supporting EKC evidence for wealthier countries and non-EKC shapes for industrializing regions.

Dynamics of residential water consumption in a panel of Italian municipalities

The purpose of this study is to estimate a residential water demand function in a dynamic framework for a panel of Italian municipalities and to calculate both short-run and long-run price elasticities. The Generalized Method of Moments (GMM) provides a suitable framework for obtaining asymptotically efficient estimators in this context. Specifically, the system GMM estimator is applied, which improves the properties of the standard first-difference estimator. The most relevant result shows that persistence of habits is coupled with high long-term price elasticity which is higher, in absolute value, that the instantaneous (one-year) price elasticity. Under an economic policy perspective, the effects of policy interventions can be suitably evaluated only in the long-run.

Carbon Kuznets Curves: Long-run Structural Dynamics and Policy Events

We study the structural differences among climate change leading ‘factors’ - Northern EU members -, and lagging actors - southern EU countries and the ‘Umbrella group’ - with regard to long run carbon-income relationships. Homogeneous and heterogeneous panel models show that the groups of countries less in favour of stringent climate policy have yet to experience a Kuznets curve, though they show relative delinking. Northern EU instead robustly shows bell shapes. Exogenous policy events such as the 1992 climate change convention appear to be relevant in shaping the EKC of Northern EU. In addition, other events such as the second oil price shock appear to have also impacted in shaping the long run emission/GDP dynamics.

Nonlinearity, heterogeneity and unobserved effects in the carbon dioxide emissions-economic development relation for advanced countries

Abstract We study long run carbon dioxide emissions-economic development relationships for advanced countries grouped in policy relevant groups: North America and Oceania, South Europe, North Europe. By relying on recent advances on Generalized Additive Mixed Models (GAMMs) and adopting interaction models, we handle simultaneously three main econometric issues, named here as functional form bias, heterogeneity bias and omitted time related factors bias, which have been proved to be relevant but have been addressed separately in previous papers. The model incorporates nonlinear effects, eventually heterogeneous across countries, for both income and time. We also handle serial correlation by using autoregressive moving average (ARMA) processes. We find that country-specific time related factors weight more than income in driving the northern EU Environmental Kuznets. Overall, the countries differ more on their carbon-time relation than on the carbon-income relation which is in almost all cases monotonic positive. Once serial correlation and (heterogeneous) time effects have been accounted for, only three Scandinavian countries – Denmark, Finland and Sweden – present some threshold effect on the CO2-development relation.

Carbon Abatement Leaders and Laggards Non Parametric Analyses of Policy Oriented Kuznets Curves

We study the eventual structural differences of climate change leading ‘actors’ such as Northern EU countries, and ‘lagging actors’ - southern EU countries and the ‘Umbrella group’ - with regard to long run (1960-2001) carbon-income relationships. Parametric and semi parametric panel models show that the groups of countries that were in the Kyoto arena less in favour of stringent climate policy, have yet to experience a turning point, though they at least show relative delinking in their monotonic carbon-income relationship. Northern EU instead robustly shows bell shapes across models, which seem to depend on time related (policy) events. Time related effects are more relevant than income effects in explaining the occurrence of robust Kuznets curves. The reaction of northern EU to exogenous policy events such as the 1992 climate change convention that gave earth to the Kyoto era, and even the second oil shock that preceded it in the 80’s are among the causes of the observed structural differences.

A Bayesian Approach to the Estimation of Environmental Kuznets Curves for CO2 Emissions

This paper investigates the EKC curves for CO2 emissions in a panel of 109 countries during the period 1959-2001. The length of the series makes the application of a heterogeneous estimator suitable from an econometric point of view. The results, based on the hierarchical Bayes estimator, show that different EKC dynamics are associated with the different sub samples of countries considered. On average, more industrialized countries show an EKC evidence in quadratic specifications, which are nevertheless probably evolving into an N shape, emerging from cubic specifications. Less developed countries consistently show that CO2 emissions still rise positively with income, though some signals of an EKC path arise.

R&D and productivity in 16 OECD countries: some heterogeneous panel estimations

This study further investigates the long-run impact of various sources of technological progress on productivity for a panel of 16 OECD countries during the period 1981 to 1998. Given the length of the series, the application of an heterogeneous estimator could be suitable from an econometric point of view. Our results, based on the Mean Group and the Pooled Mean Group estimators, show that technology spills over across countries through the channel of trade flows and that academic research significantly contributes to productivity.

Nonlinearity, Heterogeneity and Unobserved Effects in the CO2-income Relation for Advanced Countries

We study long run carbon emissions-income relationships for advanced countries grouped in policy relevant groups: North America and Oceania, South Europe, North Europe. By relying on recent advances on Generalized Additive Mixed Models (GAMMs) and adopting interaction models, we handle simultaneously three main econometric issues, named here as functional form bias, heterogeneity bias and omitted time related factors bias, which have been proved to be relevant but have been addressed separately in previous papers. The model incorporates nonlinear effects, eventually heterogeneous across countries, for both income and time. We also handle serial correlation by using autoregressive moving average (ARMA) processes. We find that country-specific time-related factors weight more than income in driving the northern EU Environmental Kuznets. Overall, the countries differ more on their carbon-time relation than on the carbon-income relation which is in almost all cases monotonic positive. Once serial correlation and (heterogeneous) time effects have been accounted for, only three Scandinavian countries - Denmark, Finland and Sweden - present some threshold effect on the CO2-development relation.

Long-run water demand estimation: habits, adjustment dynamics and structural breaks

This article examines a water demand equation for Milan for the second half of the 20th century: 1950–2001. We focus mainly on the effects of price and habits, but also account for other factors in the demand for water such as climate, income and productive activity. Allowing for trend break stationarity or nonlinear trend stationarity, we find evidence against the unit root hypothesis for many time series. Based on this result, standard cointegration analysis would not be appropriate; therefore we adopt an alternative estimation and testing procedure. We focus, in particular, on the so-called bounds testing approach, which can be applied irrespective of the level of integration of the variables and which can be a useful modelling strategy given that dynamics are important when estimating a water demand equation. The main results are that long-run price elasticity is higher than short-run elasticity, and that consumption habits are relevant. We also find that both climate, sectoral and technological modifications affect water consumption, while income is not significant. Finally, the changes to pricing schemes in the mid-1970s provoked reactions of different magnitudes among households and firms.

Water Consumption and Long-Run Urban Development: The Case of Milan

Analyses of long run consumption series are rare in literature. We study the evolution of water consumption in Milan in the twentieth century. The objective is twofold: on one side, the univariate analysis tries both to assess the impact of relevant socio-economic and environmental changes on water consumption in Milan and verify if consumers have deeply rooted consumption habits. On the other side, the multivariate analysis is used to identify the socio-economic factors that are relevant in explaining consumption evolution. Results indicate both that water users have well entrenched consumption habits and that population, climate and economic structure behave more similarly, in Euclidean terms, to water consumption than to other economic and social variables.