Effects of Affluence on Rising Household Carbon Emission in the Philippines: An Application Using Quantile Regression Approach

This study investigates whether rising affluence affects carbon emission differently by considering the distribution of households based on the level of emission. Whereas there are several empirical studies that examine this issue with mean based regression approach, limited studies have investigated the effect of affluence on the quantiles of household emission controlling for several household characteristics. Employing the methods of quantile regression, results show that rising affluence affects household emission differently. The effect is more pronounced among households in the upper emission quantile as compared to households in the lower emission quantile. This suggests that an increase in income translates to higher increase in emission among households with relatively higher level of emission compared to households with lower level of emission. With this, policy makers should take caution in devising policies mitigating climate change by capping emission because the distributional implications of such policies will vary depending on how carbon intensive the household consumption is.