Income, Environmental Disamenity, and Toxic Releases

The literature argues that income growth leads to increased demand for environmental quality and thus reduction in pollution. Using a utility theoretic model, we hypothesize that the income±pollution relationship should depend on the level of disamenity of the pollutant. We proxy for disamenity using the toxicity of releases. For counties in the United States, the functional relationship between income and releases depends on the level of disamenity: the form is more concave for more toxic releases. We find that environmental improvements occur at lower levels of per capita income for more toxic pollutants. (JEL Q25, Q28, O13)