Health Expenditure, Environmental Degradation and Economic Growth in ECOWAS: Evidence from Panel ARDL Approach

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 11

Year of Publication : 2021

Authors : Ya Assanhoun Guillaume Kouassi, Arthur Evariste Kouassi

10.14445/23939125/IJEMS-V8I11P105

How to Cite?

Ya Assanhoun Guillaume Kouassi, Arthur Evariste Kouassi, "Health Expenditure, Environmental Degradation and Economic Growth in ECOWAS: Evidence from Panel ARDL Approach," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 11, pp. 37-45, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I11P105

Abstract:

Using annual data from 2000 to 2020, we investigate the relationship between health expenditure (HE), economic growth, and environmental pollution variables used for the Economic Community of West African States (ECOWAS) fifteen countries. We use IPS (2003) and Breitung (2000) unit root tests. To study the long and short-run relationship of economic growth and environmental pollution on health expenditure, the PMG estimator using the ARDL model has been retained. At last, a Panel Vector Error Correction Model is used to show the direction of causality. The results show a long-run significant and negative effect of economic growth on health expenditure, but in the short-run, the relation is not significant. Environmental pollution variables have a statistically significant long-run positive effect on health expenditure. The PVECM results indicate a one-way causal link from economic growth to health expenditure, a bidirectional relationship between economic growth and environmental pollution variables. Surprisingly, the PVECM indicate no Granger causal relationship between HE and Co2 emissions contrary to the PMG result where there is a long-run causality. These results imply that investments in the health sector and low carbon technologies should be encouraged.

Keywords:

Health expenditure, Co2 emissions, Economic growth, PMG, PVECM Granger causality.

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