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The Causal Nexus among Energy Consumption, Environmental Degradation, Financial Development and Health Outcome: Empirical Study for Pakistan

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  • Weal M.Gh. M. Arafat

    (College of Economics and Trade, Hunan University, Changsha 410079, China)

  • Ihtisham ul Haq

    (Department of Economics, Kohat University of Science and Technology, Kohat 26000, KP, Pakistan)

  • Bahtiyar Mehmed

    (Department of Economics, Neusoft Institute Guangdong, Foshan 528225, China)

  • Azeem Abbas

    (Department of Economics, Kohat University of Science and Technology, Kohat 26000, KP, Pakistan)

  • Sisira Kumara Naradda Gamage

    (Department of Economics, Faculty of Social Sciences and Humanities, Rajarata University of Sri Lanka, Mihintale 50300, Sri Lanka)

  • Oruj Gasimli

    (College of Economics and Trade, Hunan University, Changsha 410079, China)

Abstract

Pakistan is facing an energy crisis and is also severely affected by climate change. Moreover, Pakistan is not doing well as far as health outcome indicators are concerned. The causal nexus among energy, environment, and health outcomes is well-established in literature. Besides, financial development also grabs the attention of health outcome literature as financial development can play a significant role in improving health outcomes. Thus, this study was conducted to test the causal nexus among energy consumption, environmental degradation, financial development, and health outcomes in the case of Pakistan. This study proxies health outcomes with life expectancy and infant mortality. Time series data have been analyzed through different econometric techniques, such as unit root tests, cointegration techniques, causality techniques, and cointegration regressions. Moreover, this study not just discovers the causal direction among variables but also determines the strength of causality through variance decomposition. Results of the study confirm that all variables of the study are cointegrated in the long run. The causality analysis reveals that unidirectional causality is running from energy consumption and environmental degradation to health outcomes, whereas bidirectional causality is found between financial development and health outcomes in the long run. Besides, this study also determines the effect of energy, environmental degradation, and financial development in the health outcome model and finds that energy and financial development can help Pakistan to improve health outcomes. Policy implications are recommended for Pakistan.

Suggested Citation

  • Weal M.Gh. M. Arafat & Ihtisham ul Haq & Bahtiyar Mehmed & Azeem Abbas & Sisira Kumara Naradda Gamage & Oruj Gasimli, 2022. "The Causal Nexus among Energy Consumption, Environmental Degradation, Financial Development and Health Outcome: Empirical Study for Pakistan," Energies, MDPI, vol. 15(5), pages 1-20, March.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:5:p:1859-:d:763009
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    References listed on IDEAS

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    Cited by:

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    2. Rehana Firdous & Sarvjeet Kaur Chatrath & Atif Khan Jadoon & Munawar Iqbal & Syeda Azra Batool & Zameer Ul Hasan, 2023. "Exploring Dynamic Nexus between Economic Growth, Environmental Degradation, and Public Health in Pakistan: A Moderated Mediation Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 241-249, January.

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