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Boosted income, busted environment: a tradeoff in the wider economic impacts of transport corridor investments?

Published online by Cambridge University Press:  09 January 2024

Martin Melecky Open the ORCID record for Martin Melecky [Opens in a new window] ,
Siddharth Sharma  and
Hari Subhash
Martin Melecky
Affiliation:
The World Bank, Washington, DC, USA Faculty of Economics, VSB-Technical University of Ostrava, Ostrava, Czech Republic
Siddharth Sharma*
Affiliation:
The World Bank, Washington, DC, USA
Hari Subhash
Affiliation:
Kinetica, Washington, DC, USA
*
*Corresponding author: Siddharth Sharma; Email: [email protected]
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Abstract

The literature on the impacts of transport corridors points to a tradeoff between income and environmental quality. We estimate the impacts of India's Golden Quadrilateral and North-South-East-West highways on income and environmental quality to test this tradeoff hypothesis. Applying the difference-in-difference method to district level data, we find that the highways increased both local income and particulate matter air pollution. The estimated increase in air pollution is robust to using an instrumental variables approach, while that in income is not. Examining heterogeneity in these impacts, we find that the income–environment tradeoff was less steep in districts with initially higher educational attainment rates because they experienced a smaller increase in air pollution due to the highways.

Keywords

emerging markets and developing economiesenvironmental qualityIndialarge-scale infrastructure investmentslocal incomewider economic impacts

JEL classification

R12: Size and Spatial Distributions of Regional Economic Activity H54: Infrastructures • Other Public Investment and Capital Stock F15: Economic Integration R40: General
Type
Research Article
Information
Environment and Development Economics , Volume 29 , Issue 2 , April 2024 , pp. 107 - 126
Copyright
Copyright © The Author(s), 2024. Published by Cambridge University Press

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