A Kuznets curve in environmental efficiency: an application on OECD countries

Abstract

The role of the environment is an important issue in policy making and the accurate assessment of the environmental conditions is vital. In this paper, using nonparametric techniques, an environmental efficiency index is developed for each of the OECD countries. These indexes allow one both to do cross section comparisons on the state of each country's production process in its treatment of undesirable outputs and also to trace each country's modification of their production processes overtime. Furthermore in this study we investigate the factors underlying societies' environmental concerns that eventually lead to changes in the environmental efficiency. The results provide further empirical evidence for the environmental Kuznets curve hypothesis.The role of the environment is an important issue in policy making and the accurate assessment of the environmental conditions is vital. In this paper, using nonparametric techniques, an environmental efficiency index is developed for each of the OECD countries. These indexes allow one both to do cross section comparisons on the state of each country's production process in its treatment of undesirable outputs and also to trace each country's modification of their production processes overtime. Furthermore in this study we investigate the factors underlying societies' environmental concerns that eventually lead to changes in the environmental efficiency. The results provide further empirical evidence for the environmental Kuznets curve hypothesis.An environmental efficiency index for each OECD state is developed, using nonparametric techniques. The indices facilitate cross-section comparisons on the status of each nation's production processes in its treatment of waste and pollutants. Modifications of production processes over time can also be tracked. Factors underlying societal environmental concerns that eventually result in changes in environmental efficiency are also analyzed, and results provide additional empirical evidence for the environmental Kuznets curve hypothesis.