Environmental Kuznets Curve and Air Pollution in City of London : Evidence from New Panel Smoothing Transition Regressions

The purpose of the paper is to test empirically the existence of the environmental Kuznets curve (EKC), using existing and new Panel Smoothing Transition Regressions (PSTR) in the city of London. More specifically, two new PSTR are proposed, the Gaussian and the Generalized Bell function used in Fuzzy Logic. Moreover, two air pollutants are examined using social data from the British Household Panel Survey. The air pollutants are the carbon monoxide (CO) and sulphur dioxide (SO2). In particular the paper uses three regime smoothing transition regressions. More specifically, because the definition of the two regime smoothing regressions is not very clear, as three income classes exist, three regime smoothing regressions are proposed. Thus, the three regimes include the low, middle and high income. In the case of CO a negative relationship between air emissions and income is reported in low and high income classes, while midlle income households present a positive relation. On the contrary regarding SO2, individuals and households with middle income pollute more, followed by high income class, while a negative association is presented to low income. Therefore, EKC should be examined for a number of various air pollutants in micro-economic level too, because the patterns derived from the estimations are varied using different air pollutants