Healthcare Expenditure and Human Development Index as Determinants of Environmental Quality: A Panel Study on Selected Asian Countries

Abstract

This study explores how healthcare expenditure and human development index impact environmental quality in 26 Asian countries during the period 2000–2018. Both aggregate and disaggregate (public and private) variables of healthcare expenditure are used. The dynamic ordinary least squares and augmented mean group estimation techniques are employed to assess the impact of selected variables on environmental quality captured using carbon dioxide (CO2) emissions as a proxy. The causality among the variables is tested using the Dumitrescu–Hurlin panel causality test. The outcome of the study showed that scaling aggregate healthcare expenditure, disaggregate healthcare expenditure (public and private) and human development index deteriorates environmental quality. The causality tests confirm a bidirectional association between aggregate healthcare expenditure and CO2 emissions, disaggregate healthcare expenditure and CO2 emission and a one-way connection from human development index to CO2 emission. The study finds that the significant positive impact of healthcare expenditure and human development index on CO2 emission is a concern, as rising emissions have adverse effects on the environment, public health and global economy. The study highlights the need for policies to promote sustainable development in a way that balances the needs of healthcare, human development and the environment.