Association of energy poverty and catastrophic health expenditure

Abstract

Energy poverty leads to several household consequences, including health conditions deterioration. As such, the association between energy poverty on health cannot be overemphasized. Due to these dampening health conditions, households engage in higher health expenses which could be catastrophic relative to the households' income or expenditures. This study investigates the causal association of energy poverty with the catastrophic health expenditure of Nigerian households. A Logistic binary choice model is applied using the Nigerian 2019 General Household Survey, Wave 4, (GHS4) data. The findings confirm that energy poverty is a causation of catastrophic health expenditure. Specifically, energy-poor Nigerian households have about 0.104% points higher causal chances of experiencing catastrophic health expenditure relative to non-energy poor Nigerian households. This marginal effect has also increased over the years in magnitude. On state/provincial levels, Osun and Niger states are the least catastrophic health expenditure states while Imo and Enugu states are the highest catastrophic health expenditure states. Besides, Bauchi and Kogi states have the highest probabilities of making the list of top catastrophic health expenditure states in Nigeria. These findings are robust and external validity while using different approaches like; different catastrophic health expenditure thresholds, continuous classical regression, Wave 1 (2011), Wave 2 (2013), and Wave 3 (2016) survey datasets. Based on the findings, one policy implication is the need to design, develop, and implement policies that seek to reduce or eradicate households’ energy poverty. This is shown to reduce the catastrophic health expenditure of the households.