Malaria and National Income: Examining a Two Way Causal Relationship

Saurabh Datta and Jeffrey Reimer

No 61179, 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado from Agricultural and Applied Economics Association

Abstract: Simple plots of data show that malaria has a negative correlation with national income per capita, whether looking across countries at a point in time, or looking at a single country over time. Some countries have been able to move from an equilibrium characterized by low income and high malaria, to a new equilibrium with higher income and lower rates of malaria. This study develops and estimates a simultaneous equations model to explain these changes. We distinguish three potential causal chains: (a) the ability for decreases in malaria to increase income, (b) the ability for increases in income to reduce malaria (reverse causality), and (c) external factors that may lead to both higher income and lower malaria (incidental association). We find that changes in income have a much stronger effect on malaria than the other way around. While a 1% rise in the number of malaria cases per million decreases income per capita by less than 0.01%, a 1% rise in income per capita decreases the number of malaria cases per million by more than 1.1%. If income were just 1% higher in the 100 countries of the sample, 603,189 cases of malaria could be averted annually.

Keywords: Health Economics and Policy; International Development; Labor and Human Capital (search for similar items in EconPapers)
Pages: 2
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea10:61179

DOI: 10.22004/ag.econ.61179

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