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Green returns of labor income and human capital: Empirical evidence of the environmental behavior of households in developing countries

Abstract:

An important part of the environmental contamination comes from the daily practices of the households, which has been partially ignored in the recent empirical literature. The objective of this research is to examine the green returns of labor income and human capital in a developing country, Ecuador. We use data from the National Institute of Statistics and Census (NISC) during 2010–2016 and panel data econometrics techniques. Our results show that labor income and human capital plays a relevant role in the environmental behavior of households in this country: both variables have a positive effect on the friendly environmental behavior of households. In addition, we found that the cantons 1 specialized in manufacturing have a poor environmental performance, while the cantons specializing in services do not have a clear pattern. We also don't find significant differences in the environmental behavior associated with the composition of the ethnic groups of each canton. Finally, natural geographic regions generate differences in the environmental behavior of households. One possible implication derived from this research is that those responsible for environmental policy can mitigate pollution by promoting educational programs with environmental content and encouraging improvements in the behavior of households using tax mechanisms.