The Relative Effects of Economic Growth, Environmental Pollution and Non-Communicable Diseases on Health Expenditures in European Union Countries

Daniel Badulescu, Ramona Simut, Alina Badulescu and Andrei-Vlad Badulescu
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Ramona Simut: Department of Economics and Business, Faculty of Economic Sciences, University of Oradea, 410087 Oradea, Romania
Andrei-Vlad Badulescu: Faculty of Medicine, Iuliu Hatieganu University of Medicine and Pharmacy, 400012 Cluj-Napoca, Romania

IJERPH, 2019, vol. 16, issue 24, 1-19

Abstract: National and global health policies are increasingly recognizing the key role of the environment in human health development, which is related to its economic and social determinants, such as income level, technical progress, education, quality of jobs, inequality, education or lifestyle. Research has shown that the increase of GDP (Gross Domestic Product) per capita can provide additional funds for health but also for environmental protection. However, often, economic growth is associated with the accelerated degradation of the environment, and this in turn will result in an exponential increase in harmful emissions and will implicitly determine the increasing occurrence of non-communicable diseases (NCDs), mainly cardiovascular diseases, cancers and respiratory diseases. In this paper, we investigate the role and effects of economic growth, environmental pollution and non-communicable diseases on health expenditures, for the case of EU (European Union) countries during 2000–2014. In order to investigate the long-term and the short-term relationship between them, we have employed the Panel Autoregressive Distributed Lag (ARDL) method. Using the Pedroni-Johansen cointegration methods, we found that the variables are cointegrated. The findings of this study show that economic growth is one of the most important factors influencing the health expenditures both in the long- and short-run in all the 28 EU countries. With regards to the influence of CO 2 emissions on health expenditure, we have found a negative impact in the short-run and a positive impact on the long-run. We have also introduced an interaction between NCDs and environmental expenditure as independent variable, a product variable. Finally, we have found that in all the three estimated models, the variation in environmental expenditure produces changes in NCDs’ effect on health expenditure.

Keywords: health expenditures; economic growth; environmental pollution; non-communicable diseases; EU countries (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jijerp:v:16:y:2019:i:24:p:5115-:d:298003

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