Interlinking Air Pollution, Economic Growth, and Government Health Expenditures: Evidence from South Asia

Abstract

Using environmental, economic, and demographic variables, this paper aims to reveal their effects on South Asian countries’ public health expenditures during the period 2002 to 2020. Using the short-run and long-run coefficients obtained from the panel autoregressive distributed lag (ARDL) model, this paper analyzes the effect that variables like CO2 emission, GDP per capita, life expectancy, and the proportion of elderly people on government health expenditure. The analysis shows that CO2 emissions correlate positively with GDP per capita with public health expenditures showing the burden on the health budgets due to environmental pollution and development. On the other hand, an increased elderly population is characterized by a negative relation with health spending probably due to changed healthy living lifestyles. Life expectancy has a positive relationship with healthcare expenditures and all other variables have shown insignificant effects on expenditures or else any other variable. The research stresses the post-COVID-19 need for regulating air pollution, distributing economic resources efficiently, and developing more sustainable healthcare policies in South Asia. The outcomes of these analyses should assist policymakers in strategically addressing the conflict between environmental protection and economic growth, as well as investment in public health.