The Interactive Effects of Income Inequality and Education on Environmental Degradation: A Threshold Approach in Developing Countries

Mohammadi Khyareh, Mohsen; Khairandish, Masoud

doi:10.30473/ee.2026.75143.2868

The Interactive Effects of Income Inequality and Education on Environmental Degradation: A Threshold Approach in Developing Countries

Articles in Press

Document Type : Research Paper

Authors

¹ Associate Professor of Economics, Faculty of Humanities and Sports Sciences, Gonbad Kavous University, Gonbad Kavous, Iran

² asistant professpr of economics, Gonbad Kavous university

10.30473/ee.2026.75143.2868

Abstract

This study investigates the interactive and nonlinear effects of income inequality and education on environmental degradation across a group of developing countries over the period 1995–2023. While education is widely regarded as a cornerstone of sustainable development, empirical evidence regarding its impact on environmental quality remains inconclusive. Accordingly, the main research question is: Does the effect of education on environmental degradation depend on the level of income inequality in a society? To address this question, a Panel Threshold Regression (PTR) model is employed to identify potential critical points in the relationship among the variables. The empirical findings reveal a statistically significant threshold for the Gini coefficient, approximately at the level of 39.5. In countries with income inequality below this threshold, higher levels of education are significantly associated with reduced environmental pollution. This suggests that education can effectively contribute to environmental improvement by raising awareness and promoting pro-environmental behaviors. However, in countries where income inequality exceeds this threshold, the positive effect of education diminishes and may even reverse—such that, in unequal contexts, education may foster conspicuous consumption and, consequently, intensify environmental degradation. These findings carry particular importance for countries like Iran, which simultaneously face high income inequality and the urgent need to transition toward a green economy. Therefore, educational policy design must incorporate a distributive and equity-oriented approach to enable the achievement of sustainable development goals.

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