The Park Place Economist


Worldwide public concern of the quality of our environment has ignited large efforts toward finding the determinants of environmental degradation. The Environmental Kuznet’s Curve (EKC) hypothesis models the relationship between levels of environmental degradation and income in a given economy and has been a topic of high debate in recent years. This concept hypothesizes the relationship between per capita income and the level of environmental degradation in an economy is an inverted U-shape. This focuses upon the idea that economic growth is necessary for environmental quality to be maintained or improved. Following Grossman and Krueger (1992), who first described the EKC, a deeper understanding of the empirical relationship between income and environmental quality has been rapidly evolving through recent studies of the EKC hypothesis.