The nexus between toxic-air pollution, health expenditure, and economic growth: An empirical study using ARDL

Vishal Vyas, Kiran Mehta and Renuka Sharma

International Review of Economics & Finance, 2023, vol. 84, issue C, 154-166

Abstract: India's emerging economy is dealing with severe air pollution. The main reasons for this include industrial activity, population growth, a construction boom due to housing and infrastructure development, increased vehicular traffic, congested streets, poorly maintained vehicles, limited access to clean fuel, and a lack of effective control programmes. Poor health conditions brought on by the toxic air are a double-edged sword for a nation. Increased spending on health raises the financial burden on individuals and increases individual healthcare costs. The current study investigates the association between hazardous air, health spending, and India's growing economy's GDP. The results are based on a 44-year-long dataset that includes all three factors listed above. The results are based on the ARDL bounds test and Granger causality. The nexus between all three variables is not identical in the short and long term. Granger causality has mixed evidence since it has demonstrated both one-way and two-way causation flowing between variables. The study's finding has consequences for various stakeholders who might analyze the association created between variables of a study done to enhance air quality, allocate health budgets, and design action plans for economic growth.

Keywords: Economic growth; Air pollution; Health expenditure; Autoregressive distributed lag (ARDL); Granger causality test (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:84:y:2023:i:c:p:154-166

DOI: 10.1016/j.iref.2022.11.017

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