Does income inequality affect environmental sustainability? Evidence from the ASEAN-5. Issue 2 (3rd April 2018)

• Record Type: Journal Article
• Authors: Masud, Muhammad Mehedi; Kari, Fatimah Binti; Banna, Hasanul; Saifullah, Md. Khaled
• Is Part Of: Journal of the Asia Pacific economy. Volume 23:Issue 2(2018)
• Page Start: 213
• Page End: 228
• Publication Date: 2018-04-03
• Subjects: Income inequality -- environmental sustainability -- sustainable development; Asia -- Economic conditions -- 1945- -- Periodicals; Pacific Area -- Economic conditions -- Periodicals; Asia -- Economic integration -- Periodicals; Pacific Area -- Economic integration -- Periodicals; 330.95
• DOI: 10.1080/13547860.2018.1442146
• Languages: English
• ISSNs: 1354-7860

Abstract

ABSTRACT: Income gap among the Association of Southeast Asian Nations (ASEAN) has widened, while environment degradation has worsened since the 1990s. Using the Gini coefficient as a measure of income inequality, this paper attempts to examine whether the increasing income gap would have adverse effects on environmental sustainability and the causality relationship between income inequality and environmental sustainability. Using data from the World Bank and the Standardized World Income Inequality Database, this paper deployed the Granger causality and panel regression tests to examine these relationships on the ASEAN members of Indonesia, Malaysia, the Philippines, Thailand and Vietnam over the period of 1985–2015. The empirical results indicate that bi-directional causality relationship between income inequality and environmental sustainability exists among the bottom 40%, but the causality relationship results for the overall sample are mixed. The evidence shows that policy-makers in these countries should reduce income inequality to strengthen environmental sustainability.