Economic complexity, renewable energy and ecological footprint: The role of the housing market in the USA

Abstract

Prior studies tested the environmental Kuznets curve hypothesis via the income channel, but few studies have used the housing market to examine this relationship; these papers are constrained due to the fact that CO2 emission was used as a measure of environmental deterioration, which only accounts for air pollution. Therefore, this study aims to bridge this gap by employing the housing market to test for the validity of the environmental Kuznets curve using ecological footprint in the case of the USA, which serves as a more comprehensive measure of ecological equality. The present work is the first study to explore the impact of the housing market on ecological footprint in the context of the USA. The study uses the novel bootstraps ARDL approach to assess the effects of the housing market, renewable energy, economic growth, and economic complexity on the ecological footprint in the case of the USA from 1980 to 2018. The outcomes revealed that the impacts of renewable energy and economic complexity on ecological footprint are positive and statistically significant. In addition, the environmental Kuznets curve theory has also been validated in the case of the USA. The empirical results also indicate that the housing market adversely influences ecological quality. Based on the study findings, this study offers several policy implications for the USA policymakers to promote ecological sustainability by formulating comprehensive economic and green energy policies. Furthermore, the study suggests that USA policymakers should promote a high level of complexity through knowledge and skills to achieve a sustainable ecosystem.