The trade-off between middle class and ecological footprint: Empirical cross-country analysis

Abstract

While it may be attractive to pursue win-win outcomes or positive synergies between environmental quality and human welfare, it does not necessarily mean that these goals are mutually reinforcing. With improved material standards, a large number of middle-class individuals with higher consumption demand and purchasing power are challenging ecological sustainability through frequent and high-intensity economic activities. This study investigates the ecological entanglements of the middle class and constructs a novel theoretical framework that maps the pathways through which the middle class influences the ecological footprint (EF) from power and consumption perspectives. To quantitatively verify whether the coevolution of the middle class and the EF can transcend the zero-sum tradeoffs and achieve socioecological equilibrium, we innovatively use macrostatistics to estimate the size of the middle class (SMC), constructing a comparable cross-country dataset for this variable. We then analyze the correlation between EF and the SMC using an interactive fixed effects model with panel data for 60 countries from 2000 to 2020 to examine whether a tradeoff is evident between the two variables. The results reveal strong tradeoffs between the expanding SMC, which tends to increase countries' EF. Mitigating or reversing ecological degradation may compromise the rationality of income distribution, potentially neglecting environmental issues that accompany policies intended to narrow the wealth gap. Further subgroup analysis reveals that residents in higher-income countries typically engage in higher levels of consumption and governance, but subsequent sustainability has been historically weak, resulting in a stronger positive and weaker negative impact of the SMC on the EF. Our empirical insights demonstrate the inherent contradiction within the United Nations Sustainable Development Goal targets with significant implications for advancing sustainable shared prosperity by leveraging middle-class consumptions.