Dr Rahman Khoshakhlagh, Dr Rahim Dalali Isfahani, Nasser Yarmohammadian,
Volume 2, Issue 6 (12-2011)
Environmental Kuznets Curve ( EKC) theory has evolved over several decades from its initial intuitive conception to the complex theoretical models of today. Through successive steps of empirical and theoretical debate, a quadratic relationship between income and environmental degradation has been proposed, criticized, defended, and criticized again.
Along the way, each finding have new look at the subject. Critic that is provided by Mazzanti et al. (2007) and Stern (1998) is that instead of attempting to gain insight into the underlying mechanics of an EKC theoretical foundation, there are undue focus on exploring empirical regularities among a large set of variables. These critics from opponent and supporter cause researcher to review their approach and take more concerns on details and methodology of EKC theory that make the way of theoretical works.
In this paper, a microeconomics model is provided in which household confront with decision about consumption of dirty and clean goods. It is showed that household make decision in the way that, as income increases, environment pollution rise at first and then fall when household substitute dirty goods by clean goods.
