Ecological footprint and income inequality in South Africa: a hidden dynamic?

Abstract

Purpose – This study examines the complex relationship between income inequality and the ecological footprint in South Africa, emphasizing its implications for more inclusive environmental policies. Design/methodology/approach – The result offers social, economic and environmental perspectives by employing both the autoregressive distributed lag model (ARDL) and the nonlinear autoregressive distributed lag (NARDL) models for data from 1980 to 2017. Findings – The ARDL findings indicate that income inequality does not significantly influence the ecological footprint. However, while financial development negatively affectsthe ecological footprint, factorssuch as energy consumption, economic growth and trade openness positively influence it in both the short and long term. In contrast, the NARDL modelreveals a hidden nexusin which reductionsin income inequality significantly decrease the ecological footprint, highlighting the importance of decomposing variables into their þ and – components to uncover hidden dynamics. These results highlight the potential oversight of critical relationships using traditional models and emphasize the value of disaggregated data to provide deeper insights into the interactions between economic variables and environmental outcomes. In addition, other findings from the NARDL model align with those obtained from the ARDL model, reinforcing the robustness of our analysis. Originality/value – Unlike prior research, this study reveals the asymmetric impacts of income inequality on ecological outcomes, offering a fresh perspective on integrating economic disparities into sustainable development strategies.