DOES CARBON EMISSION, ENERGY CONSUMPTION AND INCOME MATTER? INVESTIGATING FACTORS AFFECTING HEALTHCARE EXPENDITURE AMONG 61 NATIONS

Abstract

Empirical studies on the effects of carbon emissions on population health are still in their infancy and its true implications have not yet been fully understood. The purpose of this study is to conduct a comparative analysis on the relationship between carbon emissions, energy consumption, income and public healthcare expenditure in Organisation for Economic Co-operation and Development (OECD) and non-OECD countries. The empirical research employs the dynamic common correlated effects of mean group (DCCEMG) and two-stage least square estimators. The findings indicate that carbon emissions increase healthcare spending only in non-OECD countries. The relationship between energy consumption and health expenditure varies significantly between OECD and non-OECD countries. Income increases health expenditure; however, the correlation is more robust in the OECD than in non-OECD countries. As a result, the findings recommend that non-OECD governments implement strategic environmental management policies that prioritize clean and healthy air to reduce healthcare costs.