The Relationship between Environmental Performance Index, Economic Growth and Public Health Expenditures: Panel Cointegration Approach

Document Type : Original Article

Authors

1 Assistance Professor of Health Economics, Faculty of Management and Human Science, Chabahar Maritime University, Chabahar, Iran

2 Assistance Professor of Economics, Faculty of Management and Human Science, Chabahar Maritime University, Chabahar, Iran

Abstract

Introduction: Economic growth has a direct impact on public health expenditures; also, it
indirectly affects public health expenditures through the environment’s quality. Therefore,
this study aimed to investigate the relationship between environmental performance index,
economic growth, and public health expenditures in countries with high and very high
human development index.
Methods: The present descriptive-analytical and applied study was performed on 16 countries
with high and very high human development index. The time-series data required for the
years 2006-2018 were extracted from the World Bank and United Nations database and
environmental performance index extracted from the Yale University website. Im, Pesaran
and Shin (IPS), Levin, Lin, and Chu (LLC), Augmented Dickey–Fuller (ADF)– Fisher, and
Phillips-Perron (PP)–Fisher tests for stationary and Pedroni and Kao tests for cointegration
were used. The study model was estimated by the DOLS cointegration method in Eviews 10
software.
Results: The mean environmental performance index for selected countries with very high
and high human development index was 79.04 and 64.71, respectively; also, the elasticity of
public health expenditures to gross national production, environmental performance index,
physician supply, and urbanization ratio were 0.96, -2.41, 0.441 and 0.448, respectively.
Conclusion: Increasing economic growth, urbanization ratio, and physician supply had
a positive effect, and improving environmental performance index had a negative effect
on public health expenditures. Therefore, to reduce public health expenditures, policies
are recommended to maintain environmental sustainability and reduce environmental
pollutants, and to invest in advanced equipment to purify pollutant gases. Maintaining and
increasing economic growth is also essential for adopting policies to increase physicians and
invest in health infrastructure.

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