The Impact of Income Inequality on Carbon Emissions in China: A Household-Level Analysis

This study investigates the impact of income inequality on household carbon emissions in China using nationwide micro panel data. The effect is positive-households in counties with greater income inequality emit more-and remarkably robust to a battery of robustness checks. We also explore the roles that consumption patterns, time preference, and mental health play in the relationship between income inequality and household carbon emissions. The findings suggest that the change in consumption patterns caused by income inequality may be an important reason for the positive effect of inequality on household carbon emissions and that a lower time preference for consumption and improved mental health can mitigate the positive effect of income inequality on household carbon emissions. Furthermore, substantial differences are found among households at different income levels and households with heads of different ages. The findings of this study provide important insights for policy makers to reduce both inequality and emissions.