Does income inequality increase the ecological footprint in the US: evidence from FARDL test?

Abstract

In recent years, there has been a great interest in identifying determinants of environmental degradation. Although the effects of many economic, social, and political factors on the environment have been studied, the evidence of the relationship between income distribution and the environment is still quite scant. Looking at previous studies, the effect of income distribution on carbon emissions has generally been examined. In the last two years, a new line of research has emerged that investigates the links between income distribution and ecological footprint. Therefore, we investigate the effect of income inequality on the ecological footprint also considering its components. In this study, Fourier ARDL and Fourier ADL (new econometric techniques) are utilized to determine the ecological footprint-income inequality nexus in the US covering the period 1965–2017. We included economic growth and energy consumption as explanatory variables in the model. In this context, the study is a pioneering study examining the impact of income inequality on the ecological footprint as an environmental indicator in the US. The empirical results of Fourier ARDL and Fourier ADL denote that income inequality, economic growth, energy consumption, ecological footprint, and its components (cropland, fishing ground, and carbon) are cointegrated. Besides, it is found that income inequality has a positive effect on ecological footprint and cropland. Results denoted that economic growth and energy consumption have a positive and significant effect on ecological footprint and cropland, fishing ground, and carbon footprint components.