The Economic Burden of Malaria: Revisiting the Evidence.

Nayantara Sarma,Edith Patouillard,Richard E Cibulskis,Jean-Louis Arcand

doi:10.4269/ajtmh.19-0386

Abstract

.A portion of the economics literature has long debated about the relative importance of historical, institutional, geographical, and health determinants of economic growth. In 2001, Gallup and Sachs quantified the association between malaria and the level and growth of per capita income over the period 1965–1995 in a cross-country regression framework. We took a contemporary look at Gallup and Sachs’ seminal work in the context of significant progress in malaria control achieved globally since 2000. Focusing on the period 2000–2017, we used the latest data available on malaria case incidence and other determinants of economic growth, as well as macro-econometric methods that are now the professional norm. In our preferred specification using a fixed-effects model, a 10% decrease in malaria incidence was associated with an increase in income per capita of nearly 0.3% on average and a 0.11 percentage point faster per capita growth per annum. Greater average income gains were expected among higher burden countries and those with lower income. Growth of industries with the same level of labor intensity was found to be significantly slower in countries with higher malaria incidence. To analyze the causal impact of malaria on economic outcomes, we used malaria treatment failure and pyrethroid-only insecticide resistance as exogeneous instruments in two-stage least squares estimations. Despite several methodological challenges, as expected in these types of analyses, our findings confirm the intrinsic link between malaria and economic growth and underscore the importance of malaria control in the agenda for sustainable development.

Highlights

Investing in health has been considered a means to achieve economic growth and reduce poverty since the second half of the 20th century
Using an Ordinary Least Squares method (OLS) cross-sectional regression in the year 2000 and controlling for historical, institutional, geographic, and socioeconomic covariates, we find that a 10% reduction in malaria case incidence is associated with a 1.8% increase in the level of gross domestic product per capita (GDPpc) purchasing power parity (PPP) on average (Table 4, column 1)
After introducing time-invariant country-specific effects and year-specific effects, a 10% reduction in malaria incidence is associated with a 0.27% increase in the level of GDPpc PPP on average (Table 4, column 4, Figure 1)

Summary

Introduction

Investing in health has been considered a means to achieve economic growth and reduce poverty since the second half of the 20th century. Associated savings in health-care spending is hypothesized to increase investment in physical and human capital and attract higher foreign investments. Higher income for individuals or countries improves health through different channels, from better nutrition to better public health infrastructure.[9] as per the classical Grossman model of health demand, if individuals expect a longer life, their savings and investment in human capital will be greater.[10] The mutual reinforcement between health and wealth is recognized to exist in reverse, whereby sick people are more likely to become poor and those who are poor are more vulnerable to disease.[11]

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