Association between health expenditures, economic growth and environmental pollution: Long‐run and causality analysis from Asian economies

Abstract

This study examines the association between health expenditures, economic growth (EG) and environmental pollution in Asia both at panel and country level. The separate impact of EG and environmental pollution on public and private health expenditures (PRHEs) are also examined. In doing so the panel cointegration tests with the level break, common correlated effects mean group and heterogeneous panel causality test are employed. The study covers 20 Asian economies and time-period from 1995 to 2017. The results provide evidence in support of a long run association between selected variables. The results explain that EG and environmental pollution are positively associated with total health expenditures as well as with public and PRHEs in all countries. However, the magnitude of environmental pollution coefficient is greater from EG coefficient, thus indicate that environmental pollution is the key determinant in increasing national health expenditures. Causality results demonstrate the existence of two-way causality between health expenditures and EG and unidirectional causality flowing from environmental pollution to health expenditures in Asian economies. Findings of this study have provided some important suggestions to policy makers which can be used to minimize the risk of environmental pollution on health in Asian economies.

Evaluating PM2.5‐Related health costs in China—Evidence from 140 Chinese cities

“…As such, following the ongoing international debates on air pollution, there are substantial health and economic costs related to smog and haze, and the health burden is expected to increase dramatically with global warming (Johnston et al., 2021) 42 . In this regard, to improve public health by reducing ambient air pollution has become a global issue (Nasreen, 2021) 45 . According to the Global Burden of Disease 2019, fine particulate pollution in the outdoor environment and inside homes caused by using solid fuels for cooking and heating killed 6.4 million people in 2019 and caused 93 billion days lived with illness (for more information of this report, one could refer to https://www.healthdata.org/gbd/2019.…”

“…42 In this regard, to improve public health by reducing ambient air pollution has become a global issue (Nasreen, 2021). 45 According to the Global Burden of Disease 2019, fine particulate pollution in the outdoor environment and inside homes caused by using solid fuels for cooking and heating killed 6. [47][48][49] However, in many cities, air pollution rapidly returned to pre-pandemic levels as soon as the restrictions for the epidemic were relaxed (Wang and Yang, 2021).…”

Role of household waste, governance quality, and greener energy for public health: Evidence from developed economies

“…In the case of Turkey, the cointegration analysis demonstrated a unidirectional and significant association between health expenses and economic growth (9). In Asian economies, Nasreen (10) observed positive associations between economic growth and environmental pollution on health expenditures. The findings depicted that the magnitude of the coefficient of environmental pollution is higher than economic growth and bidirectional causality exists between economic growth and health expenses.…”

“…For omstance, it ican be observed from the above mentioned literature that the pollution level and wastes are playing a substantial role in human health declination (16,39). As a matter of fact, the G6 economies are still using carbon intensive energy resources, which although provides higher economic, along with the increase in public heath expenditure (10). Thus, it can be observed that both the wastes and economic growth could have a role in the health expanditures, which is relevant to study empirically.…”

“…The literature on health expenditure is limited and fixated on economic growth and renewable energy consumption. The relationship between renewable energy and economic growth on health expenses is momentous (9)(10)(11)(12). Hence the present study is interested in investigating the role of household waste and governance in public health expenditures.…”