and quality of life: a threshold hypothesis
The paper empirically examined the relationship between CO2 emissionand economic growth, using a Fixed Effects panel regression Model executed within a vector error correction framework for West African countries over the period 1970-2011. The results of cointegration indicate that there is a long-run equilibrium relationship between CO2 emission, Gross domestic product and other relevant covariates. The empirical results indicate that in the long run, there is an N-shape relationship between income and CO2 emission and that the EKC hypothesis is not supported for West Africa. It was found that the amount of CO2 emission and consequently the level of environmental pollution or quality in these countries are reflective of the rates of economic growth, the nature of macroeconomic policy, rapid population increases, domestic credit to private sector and trade openness. Both the short-run non-causality results show that economic growth, population growth rate, domestic credit to the private sector and trade openness Granger-cause carbon dioxide emission and are statistically significant, and these are supported by the estimated regression results which indicate a statistically significant positive relationship between CO2 emission and economic growth. It is recommended that while economic growth should be a focus, it is important that policies which enhance the quality of the environment be enacted and implemented among the countries in the region.
Economic Growth and Quality of Life: A Threshold Hypothesis.
One theory that relates economic growth with quality of life is the "Threshold Hypothesis," which states that economic growth up to a point brings with it an increase in quality of life. But at that point – called the threshold point – further economic growth can bring with it a deterioration in quality of life. This results in an upside-down-U-shaped curve, where the vertex of the curve represents the level of growth that should be targeted. Happiness has been shown to increase with a higher , at least up to a level of $15,000 per person.
In some instances, quality of life factors such as healthcare outcomes and educational attainment, as well as social and political liberties, do not improve as economic growth occurs.