Pollution as one of the determinants of income in Malaysia, Dr. Halimahton Borhan and Prof. Elsadig Ahmed
Dr. Halimahton Binti Burhan
Faculty of Business & Management
University Technology Mara
Prof. Elsadig Musa Ahmed
Economics Unit, Faculty of Business and Law
Multimedia University, 75450 Melaka
Abstract: This study aims to examine the relationship between economic growth and different indicators of air and water pollution in Malaysia. Air pollution indicators were assessed on a number of measures: carbon monoxide, sulphur dioxide (SO2), nitrogen dioxide, ozone and particulate matter (PM10); while water pollution indicators were evaluating on a number of measures: biochemical oxygen demand, cadmium and arsenic. The income level per capita gross domestic product per capita was measured from the year 1996 to 2006 quarterly. Being different from the study by Hung and Shaw (2004) and Shen (2006), this study estimates population density as an endogenous variable. It formulates a fourequation simultaneous model for empirical research. Testes for exogeneity with the Hausman test and estimates the simultaneity model using the two-stages least squares method. The Environmental Kuznets Curve (EKC) hypothesis is supported in the cases of SO2 and PM10, and there are several differences found between single polynomial equation estimators commonly used in EKC literatures and simultaneous equation estimators.
Keywords: Pollutants; Economic Growth; Malaysia; Environmental Kuznets Curve; Simultaneity.
Citation: Binti Borhan, H. and Musa Ahmed, E. (2010), "Pollution as one of the determinants of income in Malaysia: Comparison between single and simultaneous equation estimators of an EKC", World Journal of Science, Technology and Sustainable Development, Vol. 7 No. 3, pp. 291-308. https://doi.org/10.1108/20425945201000019