IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v84y2023icp154-166.html
   My bibliography  Save this article

The nexus between toxic-air pollution, health expenditure, and economic growth: An empirical study using ARDL

Author

Listed:
  • Vyas, Vishal
  • Mehta, Kiran
  • Sharma, Renuka

Abstract

India's emerging economy is dealing with severe air pollution. The main reasons for this include industrial activity, population growth, a construction boom due to housing and infrastructure development, increased vehicular traffic, congested streets, poorly maintained vehicles, limited access to clean fuel, and a lack of effective control programmes. Poor health conditions brought on by the toxic air are a double-edged sword for a nation. Increased spending on health raises the financial burden on individuals and increases individual healthcare costs. The current study investigates the association between hazardous air, health spending, and India's growing economy's GDP. The results are based on a 44-year-long dataset that includes all three factors listed above. The results are based on the ARDL bounds test and Granger causality. The nexus between all three variables is not identical in the short and long term. Granger causality has mixed evidence since it has demonstrated both one-way and two-way causation flowing between variables. The study's finding has consequences for various stakeholders who might analyze the association created between variables of a study done to enhance air quality, allocate health budgets, and design action plans for economic growth.

Suggested Citation

  • Vyas, Vishal & Mehta, Kiran & Sharma, Renuka, 2023. "The nexus between toxic-air pollution, health expenditure, and economic growth: An empirical study using ARDL," International Review of Economics & Finance, Elsevier, vol. 84(C), pages 154-166.
  • Handle: RePEc:eee:reveco:v:84:y:2023:i:c:p:154-166
    DOI: 10.1016/j.iref.2022.11.017
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056022002854
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.iref.2022.11.017?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chandran Govindaraju, V.G.R. & Tang, Chor Foon, 2013. "The dynamic links between CO2 emissions, economic growth and coal consumption in China and India," Applied Energy, Elsevier, vol. 104(C), pages 310-318.
    2. Tai, Meng-Yi & Chao, Chi-Chur & Hu, Shih-Wen, 2015. "Pollution, health and economic growth," The North American Journal of Economics and Finance, Elsevier, vol. 32(C), pages 155-161.
    3. Fodha, Mouez & Zaghdoud, Oussama, 2010. "Economic growth and pollutant emissions in Tunisia: An empirical analysis of the environmental Kuznets curve," Energy Policy, Elsevier, vol. 38(2), pages 1150-1156, February.
    4. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    5. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    6. He, Jie, 2006. "Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces," Ecological Economics, Elsevier, vol. 60(1), pages 228-245, November.
    7. Wang, Kuan-Min, 2011. "Health care expenditure and economic growth: Quantile panel-type analysis," Economic Modelling, Elsevier, vol. 28(4), pages 1536-1549, July.
    8. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    9. Iwata, Hiroki & Okada, Keisuke & Samreth, Sovannroeun, 2010. "Empirical study on the environmental Kuznets curve for CO2 in France: The role of nuclear energy," Energy Policy, Elsevier, vol. 38(8), pages 4057-4063, August.
    10. Li-Lin Liang & Andrew J Mirelman, 2014. "Why Do Some Countries Spend More for Health? An Assessment of Sociopolitical Determinants and International Aid for Government Health Expenditures," Health, Nutrition and Population (HNP) Discussion Paper Series 88182, The World Bank.
    11. Baltagi, Badi H. & Moscone, Francesco, 2010. "Health care expenditure and income in the OECD reconsidered: Evidence from panel data," Economic Modelling, Elsevier, vol. 27(4), pages 804-811, July.
    12. Bildirici, Melike Elif & Kayıkçı, Fazıl, 2013. "Effects of oil production on economic growth in Eurasian countries: Panel ARDL approach," Energy, Elsevier, vol. 49(C), pages 156-161.
    13. Zaman, Khalid & Abd-el Moemen, Mitwali, 2017. "The influence of electricity production, permanent cropland, high technology exports, and health expenditures on air pollution in Latin America and the Caribbean Countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 1004-1010.
    14. Vasudeva N. R. Murthy & Natalya Ketenci, 2017. "Is technology still a major driver of health expenditure in the United States? Evidence from cointegration analysis with multiple structural breaks," International Journal of Health Economics and Management, Springer, vol. 17(1), pages 29-50, March.
    15. Victoria Fan and William Savedoff, 2014. "The Health Financing Transition: A Conceptual Framework and Empirical Evidence - Working Paper 358," Working Papers 358, Center for Global Development.
    16. Barkat, Karim & Sbia, Raschid & Maouchi, Youcef, 2019. "Empirical evidence on the long and short run determinants of health expenditure in the Arab world," The Quarterly Review of Economics and Finance, Elsevier, vol. 73(C), pages 78-87.
    17. Hille, Erik & Shahbaz, Muhammad & Moosa, Imad, 2019. "The impact of FDI on regional air pollution in the Republic of Korea: A way ahead to achieve the green growth strategy?," Energy Economics, Elsevier, vol. 81(C), pages 308-326.
    18. Hanif, Imran & Faraz Raza, Syed Muhammad & Gago-de-Santos, Pilar & Abbas, Qaiser, 2019. "Fossil fuels, foreign direct investment, and economic growth have triggered CO2 emissions in emerging Asian economies: Some empirical evidence," Energy, Elsevier, vol. 171(C), pages 493-501.
    19. Liang, Li-Lin & Mirelman, Andrew J., 2014. "Why do some countries spend more for health? An assessment of sociopolitical determinants and international aid for government health expenditures," Social Science & Medicine, Elsevier, vol. 114(C), pages 161-168.
    20. Valerica Toplicianu & Selina Toplicianu, 2014. "The Impact Of Environmental Degradation On Health Expenditure," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 0, pages 172-177, May.
    21. Raza, Syed Ali & Shah, Nida & Sharif, Arshian, 2019. "Time frequency relationship between energy consumption, economic growth and environmental degradation in the United States: Evidence from transportation sector," Energy, Elsevier, vol. 173(C), pages 706-720.
    22. Sinha, Avik & Sen, Sudipta, 2016. "Atmospheric consequences of trade and human development: A case of BRIC countries," MPRA Paper 100011, University Library of Munich, Germany.
    23. Bastola, Umesh & Sapkota, Pratikshya, 2015. "Relationships among energy consumption, pollution emission, and economic growth in Nepal," Energy, Elsevier, vol. 80(C), pages 254-262.
    24. Joseph P. Newhouse, 1977. "Medical-Care Expenditure: A Cross-National Survey," Journal of Human Resources, University of Wisconsin Press, vol. 12(1), pages 115-125.
    25. Fan, Victoria Y. & Savedoff, William D., 2014. "The health financing transition: A conceptual framework and empirical evidence," Social Science & Medicine, Elsevier, vol. 105(C), pages 112-121.
    26. Apergis, Nicholas & Ben Jebli, Mehdi & Ben Youssef, Slim, 2018. "Does renewable energy consumption and health expenditures decrease carbon dioxide emissions? Evidence for sub-Saharan Africa countries," Renewable Energy, Elsevier, vol. 127(C), pages 1011-1016.
    27. Gerdtham, Ulf-G. & Sogaard, Jes & Andersson, Fredrik & Jonsson, Bengt, 1992. "An econometric analysis of health care expenditure: A cross-section study of the OECD countries," Journal of Health Economics, Elsevier, vol. 11(1), pages 63-84, May.
    28. Nasir, Muhammad & Ur Rehman, Faiz, 2011. "Environmental Kuznets Curve for carbon emissions in Pakistan: An empirical investigation," Energy Policy, Elsevier, vol. 39(3), pages 1857-1864, March.
    29. Blomqvist, A. G. & Carter, R. A. L., 1997. "Is health care really a luxury?," Journal of Health Economics, Elsevier, vol. 16(2), pages 207-229, April.
    30. Karim Barkat & Zouhair Mrabet & Mouyad Alsamara, 2016. "Does Official Development Assistance for health from developed countries displace government health expenditure in Sub-Saharan countries?," Economics Bulletin, AccessEcon, vol. 36(3), pages 1616-1635.
    31. Saboori, Behnaz & Sulaiman, Jamalludin & Mohd, Saidatulakmal, 2012. "Economic growth and CO2 emissions in Malaysia: A cointegration analysis of the Environmental Kuznets Curve," Energy Policy, Elsevier, vol. 51(C), pages 184-191.
    32. Kanjilal, Kakali & Ghosh, Sajal, 2013. "Environmental Kuznet’s curve for India: Evidence from tests for cointegration with unknown structuralbreaks," Energy Policy, Elsevier, vol. 56(C), pages 509-515.
    33. Giammanco, Maria Daniela & Gitto, Lara, 2019. "Health expenditure and FDI in Europe," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 255-267.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pan, Lijun & Wang, Yangjie & Sun, Xiaofei & Sadiq, Muhammad & Dagestani, Abd Alwahed, 2023. "Natural resources: A determining factor of geopolitical risk in Russia? Revisiting conflict-based perspective," Resources Policy, Elsevier, vol. 85(PA).
    2. Hu, Shuya & Wang, Shengnian, 2024. "Does air pollution affect the accrual anomaly in the Chinese capital market? From the perspective of investment adjustment strategy," Research in International Business and Finance, Elsevier, vol. 69(C).
    3. Yu, Dan & Wang, Shenghu & Yi, Yuting & Ren, Yu, 2024. "The role of fintech, natural resources and trade policy uncertainty towards SDGs in China: New insights from nonlinear approach," Resources Policy, Elsevier, vol. 91(C).
    4. Zahid Hussain & Bihizi Marcel & Abdul Majeed & Raymondo Sandra Marcelline Tsimisaraka, 2024. "Effects of transport–carbon intensity, transportation, and economic complexity on environmental and health expenditures," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 16523-16553, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bastola, Umesh & Sapkota, Pratikshya, 2015. "Relationships among energy consumption, pollution emission, and economic growth in Nepal," Energy, Elsevier, vol. 80(C), pages 254-262.
    2. Jaruwan Chontanawat, 2020. "Dynamic Modelling of Causal Relationship between Energy Consumption, CO 2 Emission, and Economic Growth in SE Asian Countries," Energies, MDPI, vol. 13(24), pages 1-27, December.
    3. Muhammad Shahbaz & Avik Sinha, 2019. "Environmental Kuznets curve for CO2emissions: a literature survey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(1), pages 106-168, January.
    4. Pata, Ugur Korkut, 2018. "The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey," Energy, Elsevier, vol. 160(C), pages 1115-1123.
    5. Kalpana Regmi & Jiajun Qiao & Jamal Hussain & Lochan Kumar Batala, 2022. "The effect of cereal production, cereal harvested area, and cereal yield, and forest on economic growth and environmental performance in Nepal," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(3), pages 739-762, October.
    6. Shahbaz, Muhammad & Sinha, Avik, 2019. "Environmental Kuznets Curve for CO2 emission: A survey of empirical literature," MPRA Paper 100257, University Library of Munich, Germany, revised 2019.
    7. Sapkota, Pratikshya & Bastola, Umesh, 2017. "Foreign direct investment, income, and environmental pollution in developing countries: Panel data analysis of Latin America," Energy Economics, Elsevier, vol. 64(C), pages 206-212.
    8. Alexandra-Anca Purcel, 2020. "New insights into the environmental Kuznets curve hypothesis in developing and transition economies: a literature survey," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(4), pages 585-631, October.
    9. Karaaslan, Abdulkerim & Çamkaya, Serhat, 2022. "The relationship between CO2 emissions, economic growth, health expenditure, and renewable and non-renewable energy consumption: Empirical evidence from Turkey," Renewable Energy, Elsevier, vol. 190(C), pages 457-466.
    10. Shahbaz, Muhammad & Nasir, Muhammad Ali & Roubaud, David, 2018. "Environmental degradation in France: The effects of FDI, financial development, and energy innovations," Energy Economics, Elsevier, vol. 74(C), pages 843-857.
    11. Boutabba, Mohamed Amine, 2014. "The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy," Economic Modelling, Elsevier, vol. 40(C), pages 33-41.
    12. Mohamed Abdouli & Sami Hammami, 2018. "The Dynamic Links Between Environmental Quality, Foreign Direct Investment, and Economic Growth in the Middle Eastern and North African Countries (MENA Region)," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 833-853, September.
    13. Sofien, Tiba & Omri, Anis, 2016. "Literature survey on the relationships between energy variables, environment and economic growth," MPRA Paper 82555, University Library of Munich, Germany, revised 14 Sep 2016.
    14. Sajjad Ali & Liu Ying & Tariq Shah & Azam Tariq & Abbas Ali Chandio & Ihsan Ali, 2019. "Analysis of the Nexus of CO 2 Emissions, Economic Growth, Land under Cereal Crops and Agriculture Value-Added in Pakistan Using an ARDL Approach," Energies, MDPI, vol. 12(23), pages 1-18, December.
    15. Barkat, Karim & Sbia, Raschid & Maouchi, Youcef, 2019. "Empirical evidence on the long and short run determinants of health expenditure in the Arab world," The Quarterly Review of Economics and Finance, Elsevier, vol. 73(C), pages 78-87.
    16. Shahbaz, Muhammad & Khraief, Naceur & Uddin, Gazi Salah & Ozturk, Ilhan, 2014. "Environmental Kuznets curve in an open economy: A bounds testing and causality analysis for Tunisia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 34(C), pages 325-336.
    17. Behera, Deepak Kumar & Dash, Umakant, 2019. "Prioritization of government expenditure on health in India: A fiscal space perspective," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    18. Zambrano-Monserrate, Manuel A. & Silva-Zambrano, Carlos A. & Davalos-Penafiel, Jose L. & Zambrano-Monserrate, Andrea & Ruano, Maria Alejandra, 2018. "Testing environmental Kuznets curve hypothesis in Peru: The role of renewable electricity, petroleum and dry natural gas," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 4170-4178.
    19. Saboori, Behnaz & Sulaiman, Jamalludin, 2013. "Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia," Energy Policy, Elsevier, vol. 60(C), pages 892-905.
    20. Khadiga Mohamed El-Aasar & Shaimaa A. Hanafy, 2018. "Investigating the Environmental Kuznets Curve Hypothesis in Egypt: The Role of Renewable Energy and Trade in Mitigating GHGs," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 177-184.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:84:y:2023:i:c:p:154-166. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.