Nonstationarity in the Specification of the Environmental Kuznets Curve

Numerous studies have addressed the question of the econometric specification of the Environmental Kuznets Curve (EKC). This paper adds preliminary results on nonstationarity and its effect on functional form using a panel data set for the U.S. by state from 1929 to 1994. It is found that unit-root tests strongly support a unit root in pollutants (sulfur dioxide and nitrogen oxide) and income when testing individual states. The results from panel data unit root tests provide mixed evidence about nonstationarity in EKC data.