Some of the researcher has found the value of turning point in Environmental Kuznet Curve using the formula - exp (–b1 / 2b2) Stern, D. I. (2004); Song Tao (2008). Now, I want to clarify that how to draw the kuznet curve and execute this formula to find turning point. I am using Eviews for my research, is there any option in Eviews. I request to guide me.
The equation in both papers are expressed in natural log since dealing with GDP, a large number. The general structure is:
(1) ln(E/P)it = ai + yt + B1ln(GDP/P) + B2(ln(GDP/P)2 + e
In the Song article, this equation is extended to cube. As for the turning point, in order to calculate, you need to have the value for B1 and B2. These are the parameters that you estimated from your data. Thus tau is simply calculated as:
(2) T = exp(-B1 / 2B2)
In you software and data set, you need to work out equation (1) to estimate all parameters first in order to calculate the turning point. Once equation (1) is determine, you turning point calculation is a straight forward algebra---you don't need a software to do it.
Dear Paul Louangrath and Balázs Kotosz, thank for your reply. I am working on it.
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