Environmental quality and health expenditure in ECOWAS

Healthy environment and quality health status are increasingly becoming compromised by both the developed and developing economies for rapid output growth. This is particularly so as there is an established direct link between economic growth and growth in energy consumption. This has invariably induced an increase in healthcare expenditure in order to ensure liveable and clean environment for continued human existence. The situation is particularly acute for most developing economies who do not have both technological and financial wherewithal to copy with the growing environmental menace. To this end, this study investigates the causal linkage between environmental quality and healthcare expenditure in 15 ECOWAS countries over the period 1995–2014. The empirical evidence is based on three estimators, viz pooled OLS, fixed effects and system GMM, respectively. For more specific policy targets, healthcare expenditure is further disaggregated into aggregate (national), public and private, respectively. From the empirical findings, carbon emission is found to exert a positive statistically significant impact on both public and national healthcare expenditure on the one hand, while no relationship seems to exist between environmental pollution and private healthcare expenditure on the other hand. On the policy front, we suggest that efforts should be intensified at reducing environmental degradation through introduction of carbon-free technology and other pollution abatement methods. The import of preceding statement comes into a full glare as positive income inelasticity of our result further reinforces necessity nature of the healthcare products.