Impacts of Economic Growth and Environmental Quality: Does the inverted U-shaped relationship hold?


Yukichika Kawata
Vol 14 No 2 (2011), pp. 42-50

 

Abstract:

 

In general, the environmental quality worsens in the early stage of economic growth; however, in some cases, the quality begins to improve after further economic growth. This paper presents a simple model to explain situations in which environmental quality improves or worsens. Changes were focused on the following: economic affluence, preference for natural environment, and the opportunity cost of conserving the natural environment. The results suggest that the second factor is the most important in improving conservation and environmental quality; this is because it is artificially manageable and has a substantial impact on the choice of the conservation level.

 

Keywords: natural environment, conservation, economic growth, preference


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