Impact of Environment, Life Expectancy and Real GDP per Capita on Health Expenditures: Evidence from the EU Member States.

Yilmaz Bayar,Ioana Cristina Sechel,Mirela Oana Pintea,Marius Dan Gavriletea

doi:10.3390/ijerph182413176

Abstract

This research explores the impact of environment, life expectancy, and real GDP per capita on health expenditures in a sample of 27 EU member states over the 2000–2018 period through causality and cointegration analyses. The causality analysis revealed a significant unilateral causality from variables of greenhouse gas emissions, life expectancy, and real GDP per capita to health expenditures. In other words, greenhouse gas emissions, life expectancy, and real GDP per capita had a significant impact on health expenditures in the short run. The cointegration analysis indicated that life expectancy and real GDP per capita had a significant positive impact on health expenditures at the overall panel. On the other side, the country level cointegration coefficients revealed that life expectancy had a considerable positive impact on health expenditures, real GDP per capita had a moderate positive impact on the health expenditures in most of the countries in the panel, but the environment proxied by greenhouse gas emissions had a low positive or negative impact on the health expenditures in a limited number of countries.

Highlights

IntroductionHealth care expenditures are seen by Grossman, in his health investment theory, as a key investment in both health and productivity, while health is one of the most important factors of human capital and a relevant force that drives economic growth
The purpose of this study is to empirically examine the effects that environmental quality measured through greenhouse gas emissions, life expectancy and real GDP per capita have on health expenditures
We found that all variables used in the econometric analysis are integrated of order one; we can confirm the existence of a long-run relationship between health expenditures, environmental pollution and life expectancy

Summary

Introduction

Health care expenditures are seen by Grossman, in his health investment theory, as a key investment in both health and productivity, while health is one of the most important factors of human capital and a relevant force that drives economic growth. Health is and needs to be seen as a criterion for economic performance that leads to economic growth [1], seen today in the context of sustainable development. The idea of this paper started from the concept of sustainable development which, according to the definition by the World Commission on Environment and Development (WCDE) [2], is meeting the needs of the present without compromising the needs of the future, being based on three pillars: economic, social, and environmental. The theme chosen in this study addresses several issues of interest in terms of determinants of health care expenditures such as environmental issues measured through greenhouse gas emissions, life expectancy and real

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Discussion

Conclusion