Air pollution and income inequality: a spatial econometric approach

This study re-examines the relationship between income inequality and emission in US counties, incorporating multiple measures for pollution and income inequality. The initial results show that a nonlinear relationship exists between emissions and income. Effects estimates from the spatial Durbin model show that inequality has no significant impact on SO2 emissions although a concave relationship exists between income, SO2, and CO emissions. Increased income inequality reduces CO, PM2.5, and NOx emissions for two of the three measures of inequality. The cubic term for income in the PM 2.5 specification reveals that pollution eventually increases as income rises. Our results indicate that income inequality reduces air pollution emissions for localized pollutants but has no impact of pollutants that are more geographically dispersed.