An Application of Quantile Regression on the Relationship between Economic Growth and the Quality of Environment in Selected African Countries

Abstract

This study examined the determinants factors of environmental quality by employing a panel quantile regression to incorporate the effects of economic growth on the quality of environment and ascertain the validity of EKC hypothesis within the research background of seven leading African economies over the period 1970 to 2019. The advantage of this method is considering the distributional heterogeneity to provide a detailed description of linkage between the CO2 emissions and driving factors at different emissions levels. The results show that the effects of determinants on CO2 emissions are heterogeneous. Besides, the quantile regression estimate describes the economic growth influence on CO2 emissions to be positive and higher at the 50th quantile than in other classes of quantiles. The square of economic growth tend to have insignificant effect on the 10th and 25th quantile but effect is negative and significant on the 50th , 75th and 90th quantile. This justify the presence of EKC hypothesis on the 50th, 75th and 90th quantile. The empirical results of the study reveal that the EKC hypothesis is supported in these leading African economies. Consequently, policymakers should centre on the heterogeneous effects of driving forces on CO2 emissions in different quantiles during the process of carbon emission reductions.