Air pollution and income distribution: evidence from Chinese provincial panel data
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RESEARCH ARTICLE
Air pollution and income distribution: evidence from Chinese provincial panel data Anhua Zhou 1,2
&
Jun Li 3
Received: 20 March 2020 / Accepted: 11 October 2020 # Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract In recent years, air pollution has caused an increasing number of problems in China. Individual health and labour productivity, which are affected by air pollution may affect income distribution. Therefore, this article will analyse the effect of air pollution on income distribution. We investigated the evolution of air pollution in China over the past two decades. Fixed-effects and randomeffects estimation approaches were used with data from 30 provinces in China from 1998 to 2017 to analyse the effect of air pollution on income distribution. Empirical results reveal that air pollution significantly worsens income distribution in China. Then we explored the mechanism by which air pollution affects income distribution, and found that increasing health expenditures and declining labour productivity mediate the effect of air pollution on income distribution. Considering the potential endogenous problems of air pollution affecting income distribution, the simultaneous equation model and the instrumental variable approach are employed to overcome endogenous bias. Traditional mean regression was empirically found to overestimate the impact of air pollution on income distribution. Finally, some policy implications are proposed to improve air quality and income distribution. Keywords Air pollution . Income distribution . Health expenditure . Labour productivity . China
Introduction Air pollution is an important issue within the topic of sustainable development because air pollution seriously threatens economic development, ecological civilization, and human well-being (Azam 2016; Hao et al. 2018; MEEC 2018; Mohmmed et al. 2019). Socioeconomic development and the increase in human activities are the causes of air pollution,
Responsible Editor: Eyup Dogan Electronic supplementary material The online version of this article (https://doi.org/10.1007/s11356-020-11224-x) contains supplementary material, which is available to authorized users. * Jun Li [email protected] 1
School of Mathematics and Statistics, Hunan University of Technology and Business, Changsha 410205, China
2
Key Laboratory of Hunan Province for Statistical Learning and Intelligent Computation, Changsha 410205, China
3
Business School, Hunan Normal University, Changsha 410081, China
which have led to an increasingly tense relationship between humans and nature (Dean and Green 2018). Air pollution occurs in the natural world. It is caused by the artificial input of some harmful substances into the environment, and this deterioration makes the natural world unable to purify itself and thus harms the environment. This kind of harm affects the survival and reproduction of organisms and the productivity and life of humans. According to the information of the United Nations Environment Programme (UNEP 2018), th
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