Environmental Science and Pollution Research

https://doi.org/10.1007/s11356-020-09109-0

RESEARCH ARTICLE

Is there a waste Kuznets curve for OECD? Some evidence

from panel analysis
Fırat Yılmaz 1

Received: 11 March 2020 / Accepted: 28 April 2020

# Springer-Verlag GmbH Germany, part of Springer Nature 2020

Abstract
We empirically investigated the existence of a Kuznets curve for OECD area in terms of municipal solid waste generation by
utilizing a panel data covering the 2002–2017 period. Results from GMM and between estimators conclude that an inverted U-
shaped Kuznets relationship holds for OECD countries, but only in relative terms. Results show that consumption expenditure is
one of the main drivers of waste generation. Country-based estimations of random coefficient approach state that 8 out of 16 high-
income countries and only 2 out of low-income countries have achieved decoupling the waste generation from consumption
expenditures. Some policy implications are recommended.

Keywords Kuznets curve . Waste . Decoupling

Introduction population, high-income countries are responsible for 34%

Solid waste generation is inevitable as long as the human race
exists (Shekdar 2009). Rapid urbanization, increasing popula-
tion, rising prosperity, and consumption levels have positively
contributed to the amount of solid waste generation and led to
a global challenge of sustainable management of waste prob-
lem (Beede and Bloom 1995; Wang and Nie 2001; Saeed et al.
2009; Getahun et al. 2012; Kaartinen et al. 2013; Khan et al.
2016) and put the pressure on earth so that the waste generated
has already gone beyond 30% of Earth’s carrying capacity
(Irwan et al. 2013).
The amount of waste generated has reached alarming
levels. Each year, 2.01 billion tonnes of municipal solid waste
(MSW) is generated globally. Optimistically, 33% of this
waste is not treated with an environmentally safe way. The
average daily per capita MSW generated is around 0.74 kg
with a variation between 0.11 and 4.54 kg. The amount of
MSW generated is predicted to increase 3.40 billion tonnes
till 2050. Although they form only 16% of the world’s
Responsible editor: Nicholas Apergis
* Fırat Yılmaz
firatyilmaz@antalya.edu.tr
1
Department of Economics, Antalya Bilim University,
Antalya, Turkey
or equally 683 million tonnes of the total waste generated
(Kaza et al. 2018). Figures 1 and 2 show global MSW gener-
ation by country and income groups respectively.
The MSW generated has increased mostly coherent with
private consumption expenditures and GDP in OECD area
during the 1990s. This increase seems to have slowed down
after 2000; nevertheless, the total amount of MSW generated
has already surpassed 650 million tonnes (equally 522 kg per
capita) annually. The amount and components of the MSW
varies due to income difference, consumption patterns, urban-
ization rates, lifestyles, and waste management practices. The
recycling rates have shown significant increase; however,
landfilling is still the main way how the MSW is treated in
some OECD countries (OECD 2016). Figure 3 shows the
amount of MSW generated among OECD countries.
In this paper, we focus on the MSW generation dynamics
of the OECD area. Our contributions to the literature are as
follows: firstly, according to our knowledge Cole et al. (1997)
is the only study analyzing the relationship between economic
growth and MSW generation in an environmental Kuznets
curve (EKC) framework for OECD countries. Thus, the liter-
ature still lacks of empirical evidence. Secondly, even though
some authors stated the benefits of within-country studies
(Ercolano et al. 2018), cross-country studies may still be ben-
eficial since they display the “big picture” of the situation.
Lastly, we utilize a panel dataset which allows to control un-
observed heterogeneity, and provide more variability and

Fig. 1 Global MSW generation (source: Kaza et al. 2018)
richer observations (Baltagi 2008; Wooldridge 2016).
Moreover, econometric techniques allow us to capture the
dynamic behavior of the variables and perform separate equa-
tions for each country within the panel data set. For this pur-
pose, we applied the system generalized method of moments
(GMM) approach by Arellano and Bover (1995) and Blundell
and Bond (1998) and the random coefficient (RC) estimator
by Swamy (1970) which permits slope heterogeneity among
Fig. 2 MSW generated by income groups (source: Kaza et al. 2018)
Environ Sci Pollut Res
the cross-section units and allows us to run separate regres-
sions for each country. The rest of the paper is organized as
follows: “Decoupling concept” discusses the decoupling con-
cept, “Kuznets curve for municipal solid waste” links EKC
hypothesis to MSW generation and summarizes the previous
literature, “Variables of interest” derives the variables of inter-
est, “Methodology and data” clarifies the source of the data
and develops the methodology, “Results” presents the results,
“Discussion” gives a detailed discussion of the results, and
“Policy implications and conclusion” presents a brief conclu-
sion and recommends policy implications.
Decoupling concept
One of the major steps in the transition process towards to
circular economy is the decoupling of material use from eco-
nomic activity (Foundation EM 2015). The risks of unsustain-
able and exponential growth have been spoken out by the
seminal work “Limits of Growth” in 1972 (Meadows et al.
1972). The tangible effects of climate change and environ-
mental degradation have led current growth rates and econom-
ic conditions to be questioned, and decoupling has emerged as
a substantial alternative to the current policies (Ward et al.
2016).
Decoupling can be defined as separating the tie between
economic activity and its environmental impacts. Absolute
Environ Sci Pollut Res
Fig. 3 MSW generated by OECD
countries (source: OECD 2016)
decoupling exists when economic activity increases while its
environmental impacts decrease. Decoupling turns into a rel-
ative form if environmental impacts increase but a slower rate
than economic growth (OECD 2009).
The OECD area has experienced a rise in material con-
sumption in the same line with the GDP growth during the
past 30 years. Nevertheless, due to increased productivity, the
material consumption has also been relatively decoupled dur-
ing the same period. The domestic material productivity has
jumped from 1 $ per kg to 1.8 $ per kg between 1980 and
2010. The OECD area generates 50% and 30% more value per
unit of material use than in 1990 and 2000 respectively.
Decoupling has been achieved across material groups in
OECD area in relative terms, however, not in absolute terms
(OECD 2015). Figure 4 shows the decoupling trends for ma-
terial consumption in OECD area.
Fig. 4 Material consumption trend in OECD (source: Agrawala 2017)
Last decades have also witnessed the significant efforts of
curbing the MSW generation in OECD area. These efforts
have brought along its fruits so that the amount of MSW
generated per capita seems to have the signs of relative
decoupling. The MSW generated decreased by about 3.5%
in OECD area between 2000 and 2009. Some part of this
reduction may be due to global financial crises; nonetheless,
the role of sustainable waste management policies cannot be
denied (OECD 2009). Figure 5 presents the decoupling trend
for MSW generation in OCED area.
Even though the relative decoupling of MSW from eco-
nomic activity seems to be achieved for OECD area, there is
no clear evidence how far this is decoupling from absolute
terms. In this study, we aim to fill this gap and provide evi-
dence by analyzing the main drivers of MSW generation in a
Kuznets curve framework.
Kuznets curve for municipal solid waste
The debate about how economic growth affects environmen-
tal quality has long been focus of interest among scholars. In
this sense, the EKC concept has emerged after the work of
Fig. 5 Municipal waste trend in OECD (source: Agrawala 2017)

Grossman and Krueger (1991). The EKC hypothesis, which is
originally based on Kuznets (1955), formulates an inverted U-
shaped relationship between economic growth and environ-
mental degradation. In early stages of economic development,
both economic growth and its environmental impacts follow a
same trend; they both increase. After some point of income
level, namely the “turning point,” the trend turns opposite in
favor of environmental quality which means environmental
degradation decreases while economic growth increases.
Nonetheless, there is still lack of consensus among scholars
over the existence of the EKC relationship (Stern 2004).
Economic growth can affect the environmental quality
through three ways (Copeland and Taylor 2004; Brock and
Taylor 2005). Firstly, increasing economic growth needs more
inputs which means a rise in environmental degradation. This
negative impact of economic growth is the scale effect.
Secondly, changes in income or preferences may also alter
production technologies as well as per capita emissions. This
implies a varying relationship between income and environ-
mental quality since the damage of each pollutant differs.
Lastly, the whole structure of economy may change due to
rise in income. As a consequence, cleaner or dirtier activities
may increase. This may result to a positive or negative impact
on environment, referred to the composition effect (Tsurumi
and Managi 2010).
The EKC framework has inspired the scholars to investi-
gate the existence of a waste Kuznets curve (WKC) and an
emerging body of literature have come into existence. Studies
have been conducted at city (Trujillo-Lora et al. 2013; Miyata
et al. 2013; Gui et al. 2019), regional (Mazzanti et al. 2006;
Ercolano et al. 2018; Jaligot and Chenal 2018; Madden et al.
2019), and cross-country levels (Cole et al. 1997; Mazzanti
and Zoboli 2008; Nicolli et al. 2012; Arbulu and Rey-
Maquieira 2015; Gnonlonfin et al. 2017). As far as we know,
Cole et al. (1997) is the only paper examining the existence of
a WKC curve among OECD countries. Another paper by
Johnstone and Labonne (2004) studied the determinants of
MSW generation in OECD countries. However, the authors
did not use the EKC framework.
An inverted U-shaped relationship is likely to occur if the
relationship between MSW generation and economic growth
shows a decoupling trend (Ichinose et al. 2011; Montevecchi
2016). According to Ichinose et al. (2011), absolute
decoupling and relative decoupling correspond to the de-
scending and ascending sides of the inverted U-shaped curve
respectively. Moreover, they state that absolute decoupling
comes into existence if the turning point of the curve falls into
the range of the economic indicator of the country in question.
Otherwise, relative decoupling comes into question.
The WKC hypothesis is likely to be supported by most of
the national studies in relative terms. Among city-level stud-
ies, for instance, Trujillo-Lora et al. (2013) and Miyata et al.
(2013) found evidence for the existence of the WKC curve.
Environ Sci Pollut Res
However, Gui et al. (2019) found a U-shaped relationship
rather than an inverted one.
Most of the regional studies also seem to approve the ex-
istence of WKC; nevertheless, some studies show mixed or no
evidence. Mazzanti et al. (2006) found evidence for only at
province level. Ichinose et al. (2011) utilized cross-section
data and found that the WKC is valid for Japanese
municipalities. Using a data set for Lombardy region in
Italy, Ercolano et al. (2018) found proof for the WKC curve.
Madden et al. (2019) performed analysis for New South Wales
state of Australia. They found that municipalities in rural areas
with relatively higher MSW generation and lower income
ratify the WKC curve. On the other hand, for example,
Jaligot and Chenal (2018) carried out an analysis for Vaud
canton in Switzerland and found evidence against the WKC.
Additionally, results of Chen (2010) suggested an N-shaped
relationship rather than an inverted U-shaped between dispos-
able income and waste generation.
Most of the cross-country studies in the literature have been
carried out for EU countries. Mazzanti and Zoboli (2008) used
a panel data set for EU-25 countries between 1995 and 2005
and found statistically significant coefficients signalling the
existence of a WKC relationship. However, their results show
no traces about absolute delinking. Another study is conduct-
ed for EU-15 countries by Nicolli et al. (2012). Their results
are similar to that of Mazzanti and Zoboli (2008). Arbulu and
Rey-Maquieira (2015) implemented a panel analysis covering
1997–2010 period for EU-32 countries. The main purpose of
their research, however, is to measure the impact of tourism on
MSW generation. The authors used the EKC framework and
confirmed that there exists a WKC curve for MSW
generation.
Among the cross-country studies conducted for other coun-
try groups, the study by Cole et al. (1997) is the only paper we
came across for OECD countries. The authors used many
environmental indicators; however, they found no evidence
for MSW generation but rather for local air pollutants. For
Mediterranean countries, Gnonlonfin et al. (2017) exploited
a panel data set covering the 1990–2010 period. The results of
their analysis only came up with evidence for high-income
countries with very high turning points. A study for OCED
countries was performed by Johnstone and Labonne (2004) to
determine the drivers of MSW generation; nevertheless, the
authors did not use the EKC framework. Karousakis (2009)
also performed a study for OECD countries. The author found
an increasing relationship between waste generation and per
capita income.
In the literature, studies also exist for other waste types
rather than MSW. Berrens et al. (1997) tested the WKC hy-
pothesis for hazardous wastes in USA. They used a cross-
sectional data at county level. Their results confirmed the ex-
istence of WKC hypothesis. Wang and Nie (2001) conducted
also an analysis for hazardous wastes in USA. Their results are
Environ Sci Pollut Res
the same to that of Berrens et al. (1997). For medical wastes,
Su and Chen (2018) have recently carried out an analysis for
Taiwan. According to their results, the WKC relationship
holds.
Variables of interest
A broad range of factors may influence solid waste generation.
Evidence from micro-level studies analyzing the determinants
of waste generation concluded that income, prosperity, and
consumption patterns are crucial factors determining the level
of waste generation (Ogwueleka 2013; OECD 2016; Saladie
2016; Kaza et al. 2018). Researchers found economic indica-
tors like GDP (Namlis and Komilis 2019), disposable income
(Oribe-Garcia et al. 2015); Saladie 2016; Han et al. 2018), and
consumption expenditures (Han et al. 2018) as main drivers of
solid waste generation.
Most of the regional- or city-level studies using the EKC
framework take income or GDP per capita as the main eco-
nomic indicator (Berrens et al. 1997; Wang and Nie 2001;
Mazzanti et al. 2006; Ichinose et al. 2011; Trujillo-Lora
et al. 2013; Su and Chen 2018; Gui et al. 2019; Madden
et al. 2019). On the other hand, for example, Ercolano et al.
(2018) used the declared income per capita. Jaligot and
Chenal (2018) preferred the tax point value which is the
amount of money collected from local taxes divided by the
local coefficient. Miyata et al. (2013) used city expenditures as
the main economic indicator.
Among cross-country studies Cole et al. (1997) used in-
come per capita, Gnonlonfin et al. (2017) took gross national
product (GNP) per capita, and Arbulu and Rey-Maquieira
(2015) considered GDP per capita as the economic drivers
of waste generation. On the contrary, Johnstone and
Labonne (2004); Mazzanti and Zoboli (2008); Iafolla et al.
(2010); and Nicolli et al. (2012) employed final consumption
expenditures in their analyses.
Even though there are no strict borders between GDP, dis-
posable income, and consumption expenditures, it is stated by
some authors (Rothman 1998; Andersen et al. 2007;
Ramachandra et al. 2018) that consumption is the pushing
factor of environmental impacts, as well as waste generation.
Several other works used consumption expenditure as the pri-
mary covariate and confirmed its impact by obtaining signif-
icant results (Weng et al. 2007; Otoniel et al. 2008; Han et al.
2018).
We also believe that household consumption expenditures
may provide a more reliable guideline to understand the dy-
namics behind waste generation and reflect cross-country het-
erogeneity better than GDP or disposable income. Thus, we
included consumption expenditure of households with its
squared term as economic indicators for our study.
Among other covariates, household size, population densi-
ty, urbanization rate, education level, age, employment rate,
and tourism activity have been found to be influential on
waste generation in several micro-level studies (Sujauddin
et al. 2008; Getahun et al. 2012; Beigl et al. 2008; Thanh
et al. 2010; Irwan et al. 2013; Ogwueleka 2013; Oribe-
Garcia et al. 2015; Suthar and Singh 2015; Han et al. 2018;
Pan et al. 2019).
As stated by some authors, tourism may be one of the
important drivers of solid waste generation (Teh and
Cabanban 2007; Llorens et al. 2008; Shamshiry et al. 2011).
Moreover, Arbulu and Rey-Maquieira (2015) found that tour-
ism activities positively contributed to waste generation. So,
number of tourist arrivals is also added to our model.
As a macroeconomic indicator, unemployment rate is an-
other crucial factor needed to be kept in mind when studying
the dynamics of waste generation. The unemployment rate
may influence the purchasing power parity (PPP) and thus
the amount of waste generation (Khajevand and Tehrani
2019). Several studies considered unemployment rate poten-
tial covariate of the waste generation. Of those, Chen (2010);
Keser et al. (2012); Arbulu and Rey-Maquieira (2015); and
Oribe-Garcia et al. (2015) found a negative relationship while
results of Talalaj and Walery (2015) indicated a positive cor-
relation. In this sense, it is included in our analysis.
The urbanization rate refers to the share of population liv-
ing in urbans in total population and is often associated with
higher levels of waste generation (Purcell and Magette 2009;
Thanh et al. 2010; Oribe-Garcia et al. 2015; Kaza et al. 2018;
Gui et al. 2019). We also think that it may be an important
covariate of MSW generation so it has been added into our
analysis.
Mazzanti and Zoboli (2008) stated that the waste produced
by older people may be less than the younger while on the
contrary they may have less incentive for recycling. So the
effects would be highly ambiguous. We thus decided to in-
clude the dependency ratio of elderly people (population 60
and over) to working population as a covariate capturing the
effect of the age structure.
According to Grossman and Krueger (1991) and Antweiler
et al. (2001), free trade has positive impacts on environment.
However, for waste generation the empirical evidence is still
scarce. Gnonlonfin et al. (2017) found ambiguous impacts
varying among income groups. We are also interested in the
effects of trade so we included as a share of GDP to our model.
Finally, we believe that the effect of life expectancy on waste
generation is worth studying. There is a remark stating that as
people live longer, it would make them treat gently for their and
younger generations’ future. According to this belief, it is expect-
ed that the environmental quality would be better so as the life
expectancy increases (Mariani et al. 2009). Nevertheless, for sol-
id waste generation, the literature still lacks adequate empirical
evidence. Beigl et al. (2004, 2008) are two studies that found
 Environ Sci Pollut Res

positive relationship between life expectancy and waste genera- Table 1 Data source
Dependent variable Source
tion. Thus, it takes place in the analysis.
MSW OECD
Independent variables
Cons World Bank
Methodology and data Unemp World Bank
Oldep World Bank
Data Lifexp World Bank
Tourism World Bank
Our data is an unbalanced panel with cross-section dimension
Urban World Bank
of 32 countries1 and time dimension of 15 years covering the
Trade World Bank
2002–2017 period. Two main sources of our data are OECD
statistics and World Bank open data. Our main variable of
interest in this study is MSW generation per capita and comes
from OECD statistics. All other variables including household MSW ¼ f ðCons; Cons2; Unemp; Oldep; Lifexp; Tourism; Urban; TradeÞ
final expenditure on goods and services, unemployment rate, ð1Þ
old dependency ratio, urbanization rate, number of tourist ar-
rivals, volume of trade, and life expectancy have been drawn where
from World Bank open data. We limited our time period with
the year 2002 since before this date, the data starts to show & MSW is the municipal waste generated per capita (in
gaps in MSW generation. We also excluded Australia, New kilograms),
Zealand, and Chile for this reason. Table 1 shows the sources & Cons is the household final consumption expenditures on
of the data briefly. The summary statistics are also presented in goods and services (in thousand dollars),
Table 2. & Cons2 is the squared term of Cons,
& Unemp is the unemployment rate (percentage share of
employment rate),
Methodology & Oldep is the ratio of people 65 years or older to the people
in age between 25 and 64,
In this study, we utilized different estimation methods. Firstly, & Lifexp is the life expectancy at birth (in years),
we used the system GMM by Arellano and Bover (1995) and & Tourism is the number of tourists arrived to the country,
Blundell and Bond (1998) which has gained popularity & Urban is the urbanization rate (percentage share of urban
among scholars in recent years due to its capability of han- population in total population),
dling the dynamic panel bias (Nickell 1981) as well as unbal- & Trade is the trade volume of the country (the percentage
anced panels and multiple endogenous variables (Roodman share of total imports plus total exports in GDP).
2009). Secondly, although not commonly used, we estimated
the model with the between estimator suggested by Stern Taking the natural logarithm of both sides and using the
(2010). According to Monte Carlo experiments performed panel data notation with EKC framework (Stern 2004; Baltagi
by Hauk and Wacziarg (2009), the between estimator was 2008), Eq. 1 turns into:
found to be the best estimator among many alternative esti-
mators in the presence of measurement error and omitted var-
iables. Lastly, we implemented a random coefficient (RC)
Table 2 Summary statistics
model by Swamy (1970) which takes into account of slope
heterogeneity and allows us the run separate regressions for Variables Mean Std. dev. Min Max
each cross-sectional unit.
MSW 494.34 130.73 254 829
Cons 19,253.89 9440.85 4777 41,636
The model Unemp 7.89 4.28 2.3 527.9
Oldep 23.58 6.05 8.7 45.1
The MSW generation per capita can be expressed as a func- Lifexp 78.74 3.06 70.9 84.1
tion of final consumption expenditures with its squared term Tourism 1.62e+07 1.99e+ 285,000 8.69e+
as well as several other socio-economic variables (Qiao et al. 07 07
2019): Urban 75.52 11.50 50.9 98
Trade 100.13 58.74 20.7 408.4
1
Australia, Chile, and New Zealand are excluded from the analysis.
Environ Sci Pollut Res

lnðMSW it Þ ¼ αi þ β1 lnðConsit Þþ Table 3 VIF values of

the independent Variables VIF
β2 lnðConsit Þ2 þ β3 lnðUnempit Þþ
variables
β 4 lnðOldepit Þ þ β5 lnðLifexpit Þþ ð2Þ Cons 2.89
β 6 lnðTourismit Þ þ β7 lnðUrbanit Þþ Unemp 1.40
β8 lnðTradeit Þ þ uit Oldep 1.38
Lifexp 2.42
with the intercept term αi and the random error term uit which
Tourism 1.64
can be decomposed as uit = μi + δt + vit, where μi refers to un-
Urban 1.48
observable individual heterogeneity, δt is the unobservable
Trade 1.54
time effects, and vit is the remainder error term.
The shape of the WKC curve depends on the estimated Average VIF 1.82
coefficients of the parameters (Lorente and Alvarez-Herranz
2016; Allard et al. 2018):
cross-section dependence. It can be due to spillover effects of
(i) In case β1 = β2 = 0, no relationship between waste gener-
unobserved common or spatial factors. Ignoring cross-section
ation and consumption expenditure,
dependence may cause serious problems (Pesaran 2015).
(ii) In case β1 > 0 and β2 = 0, waste generation increases
In this study, we carried out a test proposed for cross-section
monotonically with the consumption expenditure,
dependence by Pesaran (2004) to check the cross-section depen-
(iii) In case β1 < 0 and β2 = 0, waste generation decreases
dency. The results show that the null hypothesis of cross-section
monotonically with the consumption expenditure,
independence is not rejected which means that it is not an issue
(iv) In case β1 > 0 and β2 < 0, there is an inverted U-shaped
for our data. Table 4 shows the results of the test.
relationship between waste generation and consumption
expenditure; the WKC hypothesis holds,
(v) In case β1 < 0 and β2 > 0, there is a U-shaped relationship
between waste generation and consumption expenditure. Results

Multicollinearity
Before discussing the results, we checked the degree of
correlation between the covariates in order to ensure the
stability of our results. If there is a high correlation between
two variables, it may lead to higher standard errors and the
partial effects of the correlated variables are hardly distin-
guishable (Verbeek 2008). As a diagnostic statistic, the
variance inflation factor (VIF) for each variable in the
model is calculated as follows (Greene 2017):


VIF ¼ 1= 1−Rk 2
Values for VIF greater than 20 should be considered further
(Greene 2017). Since all VIF values presented in Table 3 are
under this threshold, multicollinearity is not a major concern
for our analysis.
Cross-section dependence
The key outcome of our analysis is that the signs of the coef-
ficients of the Cons and Cons2 variables support the WKC
hypothesis. Since our econometric model is in double log
form, all coefficients can also be interpreted as elasticities.
The unemployment has been found to be insignificant in all
models. The Oldep variable is significant for only in one step
system GMM. The Lifexp shows significance with a negative
sign at 1% level for one-step GMM and 5% level for two-step
GMM. This variable can be thought as an important determi-
nant of waste generation. The impact of the tourism is insig-
nificant for both models. Surprisingly, the urbanization level
which is captured by Urban variable shows also no signifi-
cance in all cases. Finally, the volume of trade variable Trade
also shows overall insignificance.
For system GMM estimations, we also report the results of
the Sargan and Hansen tests as well as the Arellano-Bond
ð3Þ AR(1) and AR(2) tests. The results suggest that system
GMM models pass these diagnostic tests.
The between estimator can be considered the long-run
estimator since it does not make any assumptions about
Table 4 Pesaran cross-
section dependence test H0: Cross-section independence
Test statistic 1.473

Another issue with panel data is the possibility of the correla- Prob. 0.1406
tion of error terms across the cross-section units, namely the
 Environ Sci Pollut Res

the nature of the time dimension of the data (Stern, 2009).
The results from this estimator support also the WKC
hypothesis. The coefficients of Cons and Cons2 variables
are positive and negative respectively. Besides, all vari-
ables except Urban are found to be significant. Lifexp and
Oldep variables are likely to contribute positively to waste
generation in the long run. Nevertheless, waste generation
seems to be negatively affected from an increase in un-
employment, volume of trade, and number of tourist ar-
rivals. Table 5 shows the results.
Significance levels are 1%, 5%, and 10%
RC approach and within-country results
Following Halkos (2003); Mazzanti and Musolesi (2013);
Sinha and Bhatt (2017); and Xu (2018), we also estimated
the model with random coefficient (RC) approach by
Swamy (1970). We examined the countries in two groups
as low income and high income. In this sense, we calcu-
lated the mean GDP of each country and then calculated
the average mean GDP based on these mean GDPs which
is more or less 38.000 $ per capita. Then, we created a
dummy variable taking the value of 1 if the country is
above this threshold, otherwise zero. This allows us to
examine the countries sharing similar development levels
and to mitigate the effects of excess variation.
Nevertheless, the general results of the RC model for all
variables show no significance, except the Unemp, and
thus are statistically meaningless to interpret in terms of
a WKC framework. This result shows that the aggregation
of slopes with heterogenous nature may not bring any
logical sense (List and Gallet 1999; Chakravarty and
Mandal 2019).
When we look at the within-country results, 8 out of 16
high-income countries and only 2 out of 16 low-income coun-
tries support the WKC hypothesis and reach decoupling in
absolute terms. Out of 16 low-income group, 5 countries show
a U-shaped relationship. The within-country results are report-
ed in Tables 6, 7, and 8. A brief discussion of the country-
specific results is presented in “Discussion.”

Table 5 The results of general

estimations Independent variable

MSW

İndependent variables One-step system GMM Two-step system GMM Between estimator

Cons 1.128*** 1.264** 9.466**

(0.348) (0.510) (1.328)
Cons2 − 0.049*** − 0.055** − 0.455**
(0.015) (0.023) (0.067)
Unemp − 0.001 − 0.005 0.047**
(0.015) (0.018) (0.023)
Oldep − 0.062** − 0.047 − 0.319**
(0.030) (0.041) (0.028)
Lifexp − 0.960*** − 1.118** − 5.67***
(0.360) (0.541) (0.635)
Tourism 0.009 0.013 0.029***
(0.008) (0.013) (0.005)
Urban − 0.020 − 0.018 0.044
(0.062) (0.076) (0.034)
Trade 0.016 0.020 0.036***
(0.019) (0.031) (0.012)
AR(1) 0.030** 0.050**
AR(2) 0.648 0.641
Hansen test 0.078 0.078
Sargan test 0.000*** 0.000***
Turning point 96.683 $ 86.379 $ 32.555 $

***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively, and the values in
parentheses show robust standard errors for system GMM estimators and bootstrapped std. errors with 100
replications for between estimator. (The turning point can be calculated as follows: exp(− β1/2β2), where β1
and β2 are the coefficients of Cons and Cons2 respectively.)
Environ Sci Pollut Res

Table 6 Country-based estimates—high-income group

High income Cons Cons2 Unemp Oldep Lifexp Tourism Urban Trade

Austria 138.451*** − 6.825*** − 0.094** − 1.135*** 2.651 0.235** − 0.552 − 0.129

(43.138) (2.129) (0.041) (0.331) (2.194) (0.098) (0.824) (0.102)
Belgium − 37.960 1.817 − 0.055 − 0.637** 1.614 − 0.266* 1.803 0.259**
(38.704) (1.915) (0.057) (0.256) (1.739) (0.137) (2.866) (0.114)
Denmark 80.710* − 3.938* − 0.018 − 0.150 − 2.886 − 0.005 9.338*** 0.344***
(46.047) (2.262) (0.042) (0.221) (2.225) (0.040) (3.496) (0.072)
France − 25.056 1.268 − 0.045 0.037 − 0.347 0.095 − 1.357 0.076
(33.301) (1.659) (0.043) (0.150) (2.363) (0.132) (2.274) (0.120)
Finland 17.051 − 0.816 − 0.005 − 0.224 0.798 0.057 − 1.894 0.082
(29.499) (1.470) (0.043) (0.161) (1.028) (0.107) (1.736) (0.079)
Germany 67.782* − 3.409* − 0.198*** − 0.972*** 1.428 0.134 2.955* − 0.135*
(41.043) (2.037) (0.022) (0.245) (1.576) (0.100) (1.520) (0.066)
Iceland 150.105*** − 7.422*** − 0.230*** − 0.631* − 4.049* 0.143*** 12.886*** 0.044
(49.809) (2.468) (0.060) (0.326) (2.215) (0.046) (3.913) (0.086)
Ireland 45.404 − 2.221 − 0.050 − 0.625*** − 0.698 0.240** − 1.775 − 0.139**
(36.121) (1.798) (0.033) (0.198) (1.997) (0.102) (1.092) (0.064)
Japan 59.723* − 2.897* − 0.118*** − 0.478*** − 0.698 − 0.003 − 0.939** − 0.035
(34.666) (1.705) (0.042) (0.123) (1.655) (0.025) (0.367) (0.052)
Luxembourg 12.653 − 0.589 0.042 0.151 − 0.946 − 0.434*** − 1.939 0.295***
(27.655) (1.357) (0.035) (0.255) (1.899) (0.095) (1.951) (0.073)
Netherlands 102.266*** − 5.053*** − 0.011 − 0.492*** 2.916** 0.028 − 0.716 − 0.007
(36.376) (1.807) (0.014) (0.133) (1.171) (0.056) (0.451) (0.048)
Norway 461.79*** − 22.133*** − 0.349*** 3.964*** − 64.956*** 1.044*** 39.773*** − 0.756***
(81.920) (3.933) (0.064) (0.707) (10.638) (0.212) (6.539) (0.184)
Sweden 139.180*** − 6.942*** − 0.124*** − 0.647** − 2.020 0.106 8.239*** 0.151
(46.236) (2.307) (0.046) (0.254) (2.016) (0.091) (3.110) (0.106)
Switzerland − 16.941 0.873 − 0.069* − 0.777*** 1.718 0.186* − 5.672** − 0.132
(13.305) (0.656) (0.036) (0.287) (1.838) (0.105) (2.521) (0.083)
UK 20.489 − 0.990 − 0.044 − 0.054 0.167 0.146 − 6.991*** − 0.143*
(40.635) (2.005) (0.044) (0.227) (1.797) (0.095) (1.912) (0.073)
USA 29.235 − 1.402 − 0.061* − 0.008 − 1.505 − 0.005 − 0.825 0.002
(28.956) (1.397) (0.034) (0.212) (2.030) (0.101) (2.581) (0.064)

***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively, and the values in parentheses show standard errors

Robustness check
In order to check the consistency of our results, we follow-
ed a couple of steps. Firstly, we wanted to check whether
the WKC hypothesis still holds if we remove the statisti-
cally insignificant variables from the models. For this pur-
pose, we removed Unemp, Tourism, Urban, and Trade var-
iables from the one-step system estimator and Oldep vari-
able from the two-step system GMM estimator. The results
are still consistent and support the WKC hypothesis
(Table 9).
We then excluded the three outlier countries, namely the
Luxembourg, Norway, and Switzerland, with relatively high
income and final consumption expenditure (Table 10). The
results of the system GMM estimators do not change. We also
repeated the same procedure for the between estimator. The
results also do not change.
Another concern is that since our main regressor is per
capita final consumption expenditures, it may be subject to
endogeneity and simultaneity problems. To examine this, we
firstly formulated a model for MSW and Cons variables in
which they are jointly determined to take into account of pos-
sible simultaneity bias. Clinging to the variables used in the
analysis, we developed the following equations:
MSW ¼ β1Cons þ β2Urban þ β3Tourism þ β4Trade
þ β5Lifexp þ β6Oldep ð4Þ
Cons ¼ β1MSW þ β2Oldep þ β3Unemp þ β4Lifexp ð5Þ
We estimated the above equations with three-stage least
squares (3SLS) (Greene 2017) (Table 11). Then, we included
also the Cons2 to Eq. (4) to check whether the WKC hypoth-
esis still holds. The coefficients of consumption variables are
 Environ Sci Pollut Res

Table 7 Country-based estimates—low-income group

Country Cons Cons2 Unemp Oldep Lifexp Tourism Urban Trade

Czech Rep. − 52.737** 2.943** 0.067* 0.020 1.113 − 0.125 − 1.762 − 0.061
(22.238) (1.217) (0.037) (0.188) (1.919) (0.095) (4.027) (0.079)
Estonia 6.194 − 0.306 0.002 − 0.873** − 1.619 0.135 24.344*** − 0.258**
(12.637) (0.707) (0.045) (0.429) (1.227) (0.190) (5.505) (0.099)
Greece 57.830*** − 2.967*** − 0.111** 1.552*** 0.844 − 0.378*** 1.950 0.011
(19.747) (1.013) (0.048) (0.588) (2.131) (0.089) (1.918) (0.081)
Hungary − 25.585 1.466 − 0.015 − 0.213 − 1.521 − 0.123 − 1.082 0.080
(25.410) (1.431) (0.038) (0.394) (2.046) (0.143) (1.307) (0.084)
Israel − 31.222* 1.618* 0.005 − 0.346 0.822 − 0.004 − 0.623 0.026
(17.231) (0.889) (0.041) (0.276) (1.720) (0.035) (2.112) (0.054)
Italy − 7.712 0.413 − 0.107*** − 0.006 2.337** − 0.101 − 1.194 − 0.083
(11.370) (0.578) (0.041) (0.405) (1.055) (0.073) (1.869) (0.057)
Korea − 43.303 2.353 0.012 − 0.146 2.285 − 0.152 − 1.449 − 0.034
(27.881) (1.522) (0.049) (0.365) (2.187) (0.106) (2.324) (0.072)
Latvia − 27.926*** 1.620*** 0.128** − 0.898** 2.067 0.112 28.972*** − 0.454***
(4.454) (0.258) (0.052) (0.428) (1.261) (0.124) (7.167) (0.103)
Lithuania − 15.513*** 0.867*** − 0.071* 0.642 0.776 − 0.104** − 12.814** 0.296***
(3.390) (0.189) (0.043) (0.472) (1.143) (0.045) (5.423) (0.055)
Mexico 11.441 − 0.649 0.007 0.126 − 0.730 − 0.004 1.926 0.093
(16.269) (0.931) (0.033) (0.370) (1.630) (0.088) (1.220) (0.064)
Poland 14.719 − 0.729 − 0.054 − 0.562 − 5.208** 0.546*** 14.731*** − 0.262**
(17.550) (1.000) (0.044) (0.376) (2.048) (0.186) (4.461) (0.125)
Portugal 23.077 − 1.145 − 0.102** 0.938 − 1.576 − 0.430*** 2.114* 0.006
(22.299) (1.164) (0.043) (0.655) (1.616) (0.108) (1.128) (0.080)
Slovak Rep. − 48.612*** 2.708*** − 0.104** 0.147 − 2.176 − 0.094 − 3.249* 0.105
(12.898) (0.713) (0.046) (0.271) (1.619) (0.072) (1.740) (0.084)
Slovenia 250.090*** − 13.250*** − 0.401*** 6.030*** − 3.530* − 0.931*** − 11.987*** 0.071
(59.375) (3.162) (0.076) (1.389) (2.086) (0.250) (2.870) (0.082)
Spain 2.166 − 0.082 − 0.051 0.939** − 1.501 − 0.062 − 7.763*** − 0.157**
(11.020) (0.565) (0.037) (0.406) (1.695) (0.122) (2.719) (0.079)
Turkey − 5.397 0.311 − 0.016 0.621* 0.407 − 0.069 − 2.284 − 0.080
(7.333) (0.417) (0.039) (0.352) (1.666) (0.072) (1.659) (0.084)

***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively, and the values in parentheses show standard errors

in line with the previous estimates signalling the evidence in Discussion

favor of the WKC hypothesis.
We also consider the endogeneity problem of the Cons
variable in terms of omitted variables bias. Nevertheless,
there is no compromised set of instruments for consump-
tion expenditure in the literature. We thus instrumented
the Cons variable with its 2-year lagged values (Reed
2015). The results of the two-stage least squares (2SLS)
present evidence in favor of WKC; nevertheless, the co-
efficients of consumption variables do not show any sta-
tistical significance. We also instrumented the Cons2 var-
iable also with its lagged values and repeated the 2SLS
procedure. The results are the same. However, we every
time failed to reject the null hypothesis of endogeneity
test which states that the variables in question are exoge-
nous. Therefore, we think that our results do not suffer
from omitted variables problem.
The results of one-step system GMM, two-step system
GMM, and the between estimator confirm the validity of
a WKC curve for OECD countries. The general results of
the RC approach do not support the WKC relationship
since the coefficients of consumption variables are statis-
tically insignificant. The predicted turning points of one-
step and two-step system GMM are 96.683 $ and 86.379
$ respectively. For the between estimator, the turning
point is 32.555 $ which is much lower. This exposes an
important conclusion. The achievement of decoupling in
absolute terms is more costly in short run than in long
run. One explanation of this might be that the absolute
decoupling requires structural reforms like promoting the
circular economy, improving the recycling rates, and in-
creasing the awareness of the whole society which need a
Environ Sci Pollut Res

Table 8 Country-based turning

points High income Turning point ($) Decoupling Low income Turning point ($) Decoupling

Austria 25,410 Absolute Czech Rep. No (U-shaped)

Belgium Estonia
Denmark 28,214 Absolute Greece 17,077 Absolute
France Hungary
Finland Israel No (U-shaped)
Germany 20,777 Absolute Italy
Iceland 24,640 Absolute Korea
Ireland Latvia No (U-shaped)
Japan 29,963 Absolute Lithuania No (U-shaped)
Luxembourg Mexico
Netherlands 24,818 Absolute Poland
Norway 33,933 Absolute Portugal
Sweden 22,572 Absolute Slovak Rep. No (U-shaped)
Switzerland Slovenia 12,548 Absolute
UK Spain
USA Turkey

The turning point can be calculated as follows: exp(− β1/2β2), where β1 and β2 are the coefficients of Cons and
Cons2 respectively

longer time period to put into practice and thus more
costly in short run.
When considering that the mean value of household final
consumption expenditures is 19,253 $ with a min. value of
4777 $ and max. value of 41,636 $, it can be concluded that
the OECD area shows the signs of relative decoupling since its
consumption patterns are in the ascending side of the WKC
curve, but far from absolute decoupling. However, the results
obtained from the between estimator state that there is abso-
lute decoupling since the value of the turning point falls be-
tween the min. and max. value of the consumption expendi-
tures. Nevertheless, we are more interested in short-run
dynamics of waste generation so we adopted the system
GMM estimators as our main estimators.
Since cross-country studies testing the WKC hypothesis
are scarce, we could only compare our results with a couple
of studies. By using gross national income (GNI), Gnonlonfin
et al. (2017) conclude that turning points for Mediterranean
countries vary from 56,000 $ to 133,000 $ per capita.
Although they did not present this in their paper, the former
value comes from the fixed-effects estimation. The results
from the Hausman-Taylor estimator range from 109.000 $ to
133.000 $. These are quite higher than our estimates. The
authors also classified the countries as high and low income,

Table 9 Robustness check—

exclusion of insignificant Independent variables One-step system GMM Two-step system GMM Between estimator
variables
Cons 1.686*** 1.895** 10.398***
(0.605) (0.805) (1.008)
Cons2 − 0.073*** − 0.083** − 0.503***
(0.027) (0.037) (0.051)
Lifexp − 1.345** − 1.625** − 5.909***
(0.551) (0.778) (0.506)
Oldep − 0.092* − 0.314***
(0.049) (0.024)
AR(1) 0.026** 0.068*
AR(2) 0.598 0.630
Hansen test 0.122 0.150
Sargan test 0.000*** 0.009***

***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively, and the values in
parentheses show robust standard errors for system GMM estimators and bootstrapped std. errors with 100
replications for between estimator
 Environ Sci Pollut Res

Table 10 Robustness check—

exclusion of outlier countries İndependent variables One-step system GMM Two-step system GMM Between estimator

Cons 1.056*** 1.234** 10.660***

(0.382) (0.562) (2.145)
Cons2 − 0.046*** − 0.054** − 0.517***
(0.016) (0.025) (0.110)
Unemp − 0.008 − 0.011 0.018
(0.012) (0.014) (0.027)
Oldep − 0.055* − 0.046 − 0.306***
(0.030) (0.037) (0.027)
Lifexp − 0.905** − 1.090** − 6.146***
(0.365) (0.544) (0.903)
Tourism 0.006 0.010 0.028***
(0.007) (0.012) (0.005)
Urban − 0.031 − 0.021 − 0.006
(0.051) (0.056) (0.034)
Trade 0.011 0.016 − 0.009
(0.020) (0.030) (0.021)
AR(1) 0.066* 0.085*
AR(2) 0.261 0.257
Hansen test 0.140 0.140
Sargan test 0.000*** 0.000***

***, **, and * denote statistical significance at the 1%, 5%, and 10% levels, respectively, and the values in
parentheses show robust standard errors for system GMM estimators and bootstrapped std. errors with 100
replications for between estimator

and their results are valid only for high-income countries. high-income and low-income countries. This conflicts with
They also found macroeconomic variables such as trade open- our findings since urbanization rate shows overall no signifi-
ness, urbanization rate, share of working women, and climate cance in our analysis and trade openness has been found to
variable precipitation rate as significant determinants of both contribute positively to waste generation in long run. We did
not include a variable referring to the share of working women
to our model; nevertheless, we added the unemployment rate
Table 11 Results of 3SLS estimation which seems to contribute positively to the waste generation
in the long run.
İndependent variables Without Cons2 With Cons2
The life expectancy at birth represented by the Lifexp var-
Cons 0.285*** 36.244** iable can be thought to be an important determinant of the
(0.053) (17.596) waste generation. However, in contrast to the previous studies
Cons2 − 1.829** like Beigl et al. (2004, 2008), the signs of the coefficients of
(0.900) this variable are negative for all models. This exciting conclu-
Oldep − 0.087** − 0.532*** sion is in the same line with the view stating that as people live
(0.035) (0.202)
longer, they become more conscious and treat environment
Lifexp − 0.430 − 13.604**
(0.477) (5.967)
more gently, resulting a decrease in waste generation.
Similarly, the dependency ratio of elderly people is found to
Tourism 0.026** 0.040
(0.010) (0.024) be highly significant in all models with negative signs.
Urban 0.198*** 0.378 Nonetheless, the results vary in the literature. Mazzanti and
(0.054) (0.239) Zoboli (2008) stated that older people may generate less waste
Trade 0.043* 0.041 than younger. By including the share of elderly people, their
(0.026) (0.059) results pointed out negative coefficients supporting this view.
Ichinose et al. (2011) also came up with the same results.
***, **, and * denote statistical significance at the 1%, 5%, and 10%
levels, respectively, and the values in parentheses show a bootstrapped However, Ercolano et al. (2018) found a positive correlation
std. errors with 100 replications between the share of older people and waste generation. Our
Environ Sci Pollut Res
findings for this variable coincide with Mazzanti and Zoboli
(2008) endorsing the notion that elderly people generate less
amount of waste.
The results of within-country estimations based on RC ap-
proach are presented in Tables 6 and 7. It can be seen from the
table that Austria, Denmark, Germany, Greece, Iceland,
Japan, Netherlands, Norway, Slovenia, and Sweden support
the WKC hypothesis while Czech Rep., Israel, Latvia,
Lithuania, and Slovak Rep. show a U-shaped relationship be-
tween consumption expenditures and waste generation. Our
results for Austria, Germany, Greece, and Netherlands overlap
with Iafolla et al. (2010) with slightly higher turning points.
However, the authors found evidence of decoupling for
Portugal, Spain, UK, Italy, Finland, and France while we did
not. Similarly Nicolli et al. (2012) found evidence also for
Portugal, Spain, and UK. In contrast, our results do not show
any traces of decoupling for these countries. Moreover,
Nicolli et al. did not find any signs of decoupling for
Denmark and Sweden. According to our results, Sweden
and Norway achieved an absolute decoupling. It is not surpris-
ing that Sweden achieves an absolute decoupling according to
our results because the country has already adopted a non-
increasing future waste policy as a part of its environmental
objectives (Sjostrom and Ostblom 2010). Similarly, Norway
has announced a Waste Prevention Programme in order to
achieve a relative decoupling of economic growth from waste
generation (Papineschi et al. 2019). For Japan and Slovenia
our results are also compatible with OECD (2019).
Nevertheless, the waste generation follows a U-shaped rela-
tionship for Czech Rep., Israel, Latvia, Lithuania, and
Slovakia.
Policy implications and conclusion
In this study, we aimed to empirically check the validity of a
Kuznets curve for OECD countries in terms of MSW genera-
tion. For this purpose, we utilized the one- and two-step sys-
tem GMM estimators as well as the between estimator sug-
gested by Stern (2010). Then, we relaxed the slope homoge-
neity assumption and performed a RC procedure by Swamy
(1970) which allows us to run separate regressions for each
country. General estimations confirm the validity of a WKC
curve. However, the achievement of absolute decoupling is far
away according to our results.
Decoupling waste generation from economic growth has
gained importance. Many countries have already announced
national waste prevention policies or adopted waste decreas-
ing policies as a part of their long-term environmental hori-
zons. In the literature, numerous studies testing the EKC hy-
pothesis can be found. However, these studies focused mainly
on a few indicators. In addition, few studies analyzed the
dynamics behind waste generation in terms of decoupling
relationship. In this sense, the literature still needs to be
enriched.
When we look at the country-specific results, half of the
high-income countries seem to have reached a decoupling
trend in absolute terms. On the other hand, only two low-
income countries succeeded in achieving an absolute
decoupling. Moreover, five countries show a U-shaped rela-
tionship which means waste generation increases with the
consumption expenditures. This brings an exciting result.
Even though an increase in the per capita consumption expen-
diture is associated with more per capita waste generation,
high levels of consumption, as well as income, seem to be
necessary to reach the goal of absolute decoupling.
The inference above also states that countries which have
not reached any decoupling trend yet seem to inevitably bur-
den the negative externalities of waste generation after joining
into the trend. The main point that policy makers should take
into account that in the short or medium run, policies targeting
to reduce the waste generation via manipulating the consump-
tion expenditures per capita might be ineffective. That is be-
cause the estimated turning point is relatively high when com-
pared with consumption expenditure patterns. In order to mit-
igate the negative effects and reduce the amount of waste
generated, policy makers should seek alternative policies such
as promoting the circular economy, recycling, and waste
source separation which is crucial to achieve efficient
recycling levels.
Volume of trade and tourism show also signals of positive
contribution of waste generation in the long run. For countries
attracting many visitors such as Italy, Spain, and Turkey, waste
management policies should be extended in the manner that it
embraces sustainable or eco-friendly concepts rather than all
included consumption-based tourism. Although the pure ef-
fects of trade are out of scope of this paper, we contrasted the
view that trade makes environment better off. It should be
considered for future research.
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