Analyzing the Asymmetric Impact of Air Pollution on Per Capita Health Expenditure in Iran
Subject Areas : -Health economy
abolghasem Mohammadian Mansour
1
1 - Assistants Professor, Department of Economics, Payame Noor University, Tehran, Iran
Keywords: Air pollution, Iran, Per Capita Health Expenditure, Asymmetric Effect, Non-linear Auto-Regressive Distributed Lags (NARDL),
Abstract :
Introduction: Air pollution from different channels leads to weakening of health and increasing demand for health care, and as a result, increasing per capita health expenditure. On the other hand, it is possible that the impact of air pollution on health costs is asymmetric; In this sense, the effectiveness of health costs from increasing and decreasing the air pollution is not the same. Based on this, the main purpose of this study is to experimentally estimate the asymmetric effect of air pollution index on per capita health expenditure in Iran.Methods: The present descriptive-analytical and applied study using the time series data during the period of 1989-2020, investigated the short-term and long-term effects of positive and negative air pollution shocks, per capita income, dependency burden, and urbanization on per capita health expenditure. The data used were also collected from the Central bank of Islamic Republic of Iran database and World Development Indicators belonging to the World Bank. Also, the model was estimated in the form of a regression model using the Non-linear Auto-Regressive Distributed Lags (NARDL) method in Eviews 12.0 software.Results: The results show that in the short and long term, the effect of positive air pollution index shocks on the increase of health expenditure per capita is greater than the effect of its negative shocks on the decrease of health expenditure per capita (confirmation of asymmetric effect). With a one percent increase in CO2 emissions, in the long and short term, per capita health expenditure will increase by about 0.18 and 0.04 percent, respectively. On the other hand, with a one percent reduction in CO2 emissions, in the long and short term, per capita health expenditure will decrease by 0.06 and 0.01 percent, respectively.Conclusion: Considering that the effect of increasing shocks of air pollution on health costs is much greater than the effect of decreasing shocks, adopting policies and strategies to prevent the increase of air pollution emissions in the current period can help reduce future additional per capita costs in the health sector.
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24- Matuka A, Asafo S. Effects of services on economic growth in Albania: An ARDL approach. The Journal of International Trade & Economic Development, 2021; 30(6): 865-881. https://doi.org/10.1080/09638199.2021.1910723
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30- Magazzino C, Mele M. The determinants of health expenditure in Italian regions. International Journal of Economics & Finance, 2012; 4(3): 61-72.
31- Seshamani M, Gray AM. A longitudinal study of the effects of age and time to death on hospital costs. Journal of Health Economics, 2004; 23(2): 217-235.
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33- Cetin MA, Bakirtas, I. Does urbanization Induce the health expenditures? A dynamic macro-panel analysis for developing countries. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 2019; 61: 208-222.
_||_1- Alizadeh M, Golkhandan A. Robust determinants of health sector costs in Iran: Bayesian Model Averaging approach. Journal of Healthcare Management, 2016; 7(2): 47-61. [Persian]
2- Golkhandan A. Measuring the impact of air pollution on health sector costs in Iran. Health Research Journal, 2017; 3(7), 157-166. [Persian]
3- Kwon J. Data Review: How many people die from air pollution? 2022. https://ourworldindata.org/data-review-air-pollution-deaths
4- Bretschger L, Vinogradova A. Human development at risk: Economic growth with pollution-induced health shocks; 2016. www.ethz.ch/content/dam
5- World Health Organization. Ambient (Outdoor) Air Quality and Health, Fact sheet N_313; 2014. www.who.int/mediacentre/ factsheets/fs313/en/
6- Blázquez-Fernández C. Cantarero-Prieto D, Pascual-Sáez M. On the nexus of air pollution and health expenditures: new empirical evidence. Gaceta Sanitaria, 2019; 33(4): 389-394.
7- Nathan Pelletier, R. Conceptual basis for development of the European Sustainability Footprint. Environmental Development, 2013; 9: 12-23.
8- Zeeshan M, Han J, Rehman A, Ullah I, and Afridi, FE. Exploring asymmetric nexus between CO2 emissions, environmental pollution, and household health expenditure in China, Risk Manag Healthc Policy, 2021; 14: 527-539.
9- Demir S, Demir H, Karaduman C, Cetin, M. Environmental quality and health expenditures efficiency in Türkiye: the role of natural resources. Environmental Science and Pollution Research, 2022; 30: 15170-15185.
10- Assadzadeh A, Bastan F, Shahverdi A. The impact of environmental quality and pollution on health expenditures: a case study of petroleum exporting countries, In Proceedings of 29th International Business Research Conference; 2014: 24-25. [Persian]
11- Abdullah H, Azam M, Zakariya S. The impact of environmental quality on public health expenditure in Malaysia, Asia Pacific Institute of Advanced Research (APIAR) ,2016; 2(2): 365-380.
12- Martinez GS, Spadaro JV, Chapizanis D, Kendrovski V, Kochubovski M, Mudu P. Health impacts and economic costs of air pollution in the metropolitan area of Skopje, Int J Environ Res Public Health, 2018; 15(4): 626.
13- Mujtaba G, Ashfaq S. The impact of environment degrading factors and remittances on health expenditure: an asymmetric ARDL and dynamic simulated ARDL approach. Environ Sci Pollut Res Int, 2022; 29(6): 8560-8576.
14- Xia F, Xing J, Xu J, Pan J. The short-term impact of air pollution on medical expenditures: Evidence from Beijing, Journal of Environmental Economics and Management; 2022: 114. https://doi.org/10.1016/j.jeem.2022.102680
15- Salatin P, & Eslambolchi S. Examining effect of air pollution on health expenditure in selected countries. Journal of Environmental Science and Technology, 2016; 18(1): 107-121. [Persian]
16- Bahrami M A, Pakdaman M, Ranjbar M, Yousefzade S, Kazeminasab M, Izadi R et al. The impact of selected health, environment, and economics indicators on health expenditure in developed and developing countries. Manage Strat Health Syst, 2017; 2(1): 20-28. [Persian]
17- Golkhandan A, Sahraei S. The prediction of Iran's per capita health expenditures up to 2041 horizon using the genetic and particle swarm optimization algorithms. Journal of healthcare management, 2019; 9(4): 53-66. [Persian]
18- Granger CW, Yoon G. Hidden co-integration. University of California, Working Paper 2002.
19- Pesaran MH, Shin Y, Smith RJ. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 2001; 16:289-326.
20- Ang JB. CO2 emissions, energy consumption, and output in France. Energy Policy, 2007; 35: 4772-4778.
21- Zivot E, Andrews DWK. Further evidence on the great crash, the oil price shock, and the unit root hypothesis. Journal of Business and Economic Statistics, 1992; 10: 25-70.
22- Lee J, Strazisich M. Minimum LM unit root test with two structural breaks. Review of Economics and Statistics ,2003; 85: 1082–1089.
24- Matuka A, Asafo S. Effects of services on economic growth in Albania: An ARDL approach. The Journal of International Trade & Economic Development, 2021; 30(6): 865-881. https://doi.org/10.1080/09638199.2021.1910723
25- Schorderet Y. Asymmetric Cointegration. 2003; University of Geneva.
26.Shahabadi A, Ghorbani Golparvar, M. Impact of misery index on health spending in Iran. Economic Modelling, 2016; 10(33): 133-157. [Persian]
27- VyasV, Mehta K, Sharma R. The nexus between toxic-air pollution, health expenditure, and economic growth: An empirical study using ARDL, International Review of Economics & Finance, 2023; 84: 154-166.
28- Yahyavi Dizaj J, Na'emani F, Mohammadzadeh Y, Irandoust K. Effect of aging on health expenditure and gross domestic product in selected countries by a dynamic panel approach. Manage Strat Health Syst, 2019; 4(1): 37-46. [Persian]
29- Yahyavi Dizaj J, Emamgholipour S, Pourreza A, Nommani F, Molemi S. Effect of aging on catastrophic health expenditure in Iran during the period 2007-2016. Sjsph, 2018; 16(3): 216-227. [Persian]
30- Magazzino C, Mele M. The determinants of health expenditure in Italian regions. International Journal of Economics & Finance, 2012; 4(3): 61-72.
31- Seshamani M, Gray AM. A longitudinal study of the effects of age and time to death on hospital costs. Journal of Health Economics, 2004; 23(2): 217-235.
32- Shao Q, Tao RT, Luca, MM. The effect of urbanization on health care expenditure: evidence from China, Public Health, 2022; 10. https://doi.org/10.3389/fpubh.2022.850872
33- Cetin MA, Bakirtas, I. Does urbanization Induce the health expenditures? A dynamic macro-panel analysis for developing countries. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 2019; 61: 208-222.