Keywords
pollution, general equilibrium, pigou, the inverted u-shape, simulation
Start Date
1-7-2006 12:00 AM
Abstract
In 1995 Grossman and Krueger, utilizing the data collected worldwide, discovered the invertedU-shaped relation between the per-capita GDP and air pollution level. It may be explained that the relationholds in each country. To explain the inverted U-shaped relation, however, an alternative explanation is alsopossible: although for each country's cross-sectional data the positive correlation holds between the percapitaGDP and pollution level, the worldwide data may exhibit the inverted U-shape. The worldwide resultmight be regarded as the one of time-series data, in which each country's preference relation towardsenvironment is different depending on the stage of economic growth. First, it is shown by economicmodeling that the above two explanations are possible. Next, it is examined if the inverted U-shaped relationholds for a specific country in a specific year, utilizing Japanese cross-sectional data for 1990 and 2000.Three types of pollution are dealt with: SOX, NOX, and SPM. The inverted U-shaped relation does exist forSOX case in 2000. It is the case, however, solely for SOX case in 2000. For all the other cases on NOX andSPM, only the positive correlation exists. Thus, the explanation in terms of the historical shift of preferencerelation towards more pollution-intolerant is more persuasive in Japan.
Air Pollution in Japan: the Inverted U-Shaped Relation
In 1995 Grossman and Krueger, utilizing the data collected worldwide, discovered the invertedU-shaped relation between the per-capita GDP and air pollution level. It may be explained that the relationholds in each country. To explain the inverted U-shaped relation, however, an alternative explanation is alsopossible: although for each country's cross-sectional data the positive correlation holds between the percapitaGDP and pollution level, the worldwide data may exhibit the inverted U-shape. The worldwide resultmight be regarded as the one of time-series data, in which each country's preference relation towardsenvironment is different depending on the stage of economic growth. First, it is shown by economicmodeling that the above two explanations are possible. Next, it is examined if the inverted U-shaped relationholds for a specific country in a specific year, utilizing Japanese cross-sectional data for 1990 and 2000.Three types of pollution are dealt with: SOX, NOX, and SPM. The inverted U-shaped relation does exist forSOX case in 2000. It is the case, however, solely for SOX case in 2000. For all the other cases on NOX andSPM, only the positive correlation exists. Thus, the explanation in terms of the historical shift of preferencerelation towards more pollution-intolerant is more persuasive in Japan.
