An Application of Quantile Regression on the Relationship between Economic Growth and the Quality of Environment in Selected African Countries

Document Type : Research Paper

Authors

1 Department of Economics and Development Studies, Federal University Dutse, Jigawa State Nigeria, Nigeria

2 Faculty of Business and Management, Universiti Sultan Zainal Abidin, Terengganu, Malaysia.

Abstract

This study examined the determinants factors of environmental quality by employing a panel quantile regression to incorporate the effects of economic growth on the quality of the environment and ascertain the validity of the EKC hypothesis within the research background of seven leading African economies over the period 1970 to 2019. The advantage of this method is considering the distributional heterogeneity to provide a detailed description of the linkage between CO2 emissions and driving factors at different emissions levels. The results show that the effects of determinants on CO2 emissions are heterogeneous. Besides, the quantile regression estimate describes the economic growth influence on CO2 emissions to be positive and higher at the 50th quantile than in other classes of quantiles. The square of economic growth tends to have an insignificant effect on the 10th and 25th quantiles but the effect is negative and significant on the 50th, 75th, and 90th quantiles. This justifies the presence of the EKC hypothesis on the 50th, 75th, and 90th quantiles. The empirical results of the study reveal that the EKC hypothesis is supported in these leading African economies. Consequently, policymakers should center on the heterogeneous effects of driving forces on CO2 emissions in different quantiles during the process of carbon emission reductions.

Keywords

Main Subjects

References

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Iranian Economic Review
Volume 27, Issue 2
July 2023
Pages 283-315

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