Air pollution, health expenditure and economic growth in MINT countries: a trivariate causality test

Abstract

PurposeThis paper examines the long-run and dynamic causal relationship among air pollution, health expenditure and economic growth in Mexico, Indonesia, Nigeria and Turkey (MINT countries).Design/methodology/approachThe bounds test approach to cointegration and causality test was employed on data covering 1995–2018.FindingsThe study shows evidence of a long-run relationship among the variables in MINT countries and the causality test confirms the existence of a bidirectional causal nexus between health expenditure and economic growth in the four countries. It also confirms that there is a bidirectional causal relationship between carbon dioxide (CO2) emission and economic growth, except in Nigeria where a unidirectional causal relationship was found running from CO2 emissions to economic growth. In addition, a bidirectional causal relationship was found between air pollution and health expenditure in Turkey, while no causal relationship was found among these variables in Nigeria.Research limitations/implicationsThis study is limited by available data and it only focuses on four emerging economies. To address this, future studies can expand this scope to more emerging economies with severe air pollution and also extend the scope when more recent data becomes available.Practical implicationsThis study suggests that pollution standards in MINT countries should be monitored and enforced with transparency so as to mitigate its health implications and ensure the sustainability of economic growth.Social implicationsThe study confirms the importance of keeping air pollution as low as possible because of its negative effect on health and economic output.Originality/valueThe study accounts for the complexity of each MINT country instead of providing a general discussion on the relationship between air pollution, health expenditure and economic growth in MINT countries.