The Impact of Economic Growth, Renewable Energy Consumption, Financial Development and Urbanizatıon on Health Expenditure: A Time-Series Evidence on Turkish Economy

Abstract

This study aims to investigate the effects of economic growth, renewable energy consumption, financial development and urbanization on health expenditures in the case of Turkey. For this purpose, the time series techniques are used in the case of Turkey from 1985 through 2018. The ADF, PP and DF-GLS tests are applied for stationarity analysis. The Johansen-Juselius and ARDL bounds test are applied for cointegration analysis. The long-run coefficients are estimated by using the DOLS estimation method. Finally, the VECM Granger causality technique is applied for causality analysis. The findings reveal that: (i) there is cointegration between the variables, (ii) renewable energy consumption and financial development have negative effects on health expenditures, (iii) economic growth has a positive impact on health expenditures, (iv) there are bidirectional causalities between health expenditure, renewable energy consumption, financial development and urbanization in the long term. In conclusion, this study confirms the critical role of renewable energy consumption and financial development in reducing health expenditures. For this reason, policymakers can focus on renewable energy projects, financial development and investments in reducing urban density to improve air quality and provide a healthy environment for the society.

Keywords

• Health Expenditure
• Renewable Energy Consumption
• Financial Development
• Urbanization
• ARDL
• Causality

Ekonomik Büyüme, Yenilenebilir Enerji Tüketimi, Finansal Gelişme ve Kentleşmenin Sağlık Harcamaları Üzerindeki Etkisi: Türkiye Ekonomisi Üzerine Bir Zaman Serisi Kanıtı

Abstract

Çalışmanın amacı, Türkiye örneğinde ekonomik büyüme, yenilenebilir enerji tüketimi, finansal gelişme ve kentleşmenin sağlık harcamaları üzerindeki etkilerini araştırmaktır. Bu amaç doğrultusunda, 1985-2018 dönemi için Türkiye özelinde zaman serisi teknikleri kullanılmaktadır. Durağanlık analizi için ADF, PP ve DF-GLS testleri uygulanmaktadır. Eşbütünleşme analizi için Johansen-Juselius ve ARDL sınır testi uygulanmaktadır. Uzun dönem katsayıları, DOLS tahmin yöntemi kullanılarak tahmin edilmektedir. Son olarak, nedensellik analizi için VECM Granger nedensellik tekniği uygulanmaktadır. Bulgular; (i) değişkenler arasında eşbütünleşmenin olduğunu, (ii) yenilenebilir enerji tüketimi ve finansal gelişmenin sağlık harcamaları üzerinde negatif etkisinin olduğunu, (iii) ekonomik büyümenin sağlık harcamaları üzerinde pozitif bir etkiye sahip olduğunu, (iv) uzun dönemde sağlık harcaması, yenilenebilir enerji tüketimi, finansal gelişme ve kentleşme arasında çift yönlü nedensellik olduğunu ortaya koymaktadır. Sonuç olarak bu çalışma, yenilenebilir enerji tüketimi ve finansal gelişmenin sağlık harcamalarını azaltmadaki kritik rolünü doğrulamaktadır. Bu nedenle politika yapıcıları, hava kalitesini artırmak ve topluma sağlıklı bir çevre sunabilmek için yenilenebilir enerji projelerine, finansal gelişmeye ve kent yoğunluğunu azaltmaya dönük yatırımlara ağırlık verebilirler.

Keywords

• Sağlık Harcaması
• Yenilenebilir Enerji Tüketimi
• Finansal Gelişme
• Kentleşme
• ARDL
• Nedensellik

References

1. Abbas, F. & Hiemenz, U. (2011). Determinants of public health expenditures in Pakistan. (Center for Development Research (ZEF) Discussion Papers on Development Policy No. 158). Retrieved from (Erişim Tarihi: 02.01.2022), https://www.econstor.eu/bitstream/10419/84800/1/679510230.pdf.
2. Apergis, N., Gupta, R., Lau CKM & Mukherjee, Z. (2018a). State-level carbon dioxide emissions: does it affect health care expenditure? Renew Sustain Energy Rev, 91: 521-530. Apergis, N., Jebli, M.B. & Youssef, S.B. (2018b). Does renewable energy consumption and health expenditures decrease carbon dioxide emissions? Evidence for subSaharan Africa countries. Renew Energy, 127, 1011-1016.
3. Barros, P.P. (1998). The black box of healthcare expenditure growth determinants. Health Economics, 7, 533-544. Bedir, S. (2016). Healthcare expenditure and economic growth in developing countries. Advances in Economics and Business, 4(2), 76-86.
4. Blomqvist, A. G. & Carter, R.A.L. (1997). Is healthcare really a luxury? Journal of Health Economics, 16, 207-229.
5. Boachie, M. K., Mensah, I. O., Sobiesuo, P., Immurana, M., Iddrisu, A.A. & Kyei-Brobbey, I. (2014). Determinants of public health expenditure in Ghana: A cointegration analysis. Journal of Behavioural Economics, Finance, Entrepreneurship, Accounting and Transport, 2(2), 35-40.
6. Chaabouni, S. & Saidi, K. (2017). The dynamic links between carbon dioxide (CO2) emissions, health spending and GDP growth: a case study for 51 countries. Environ Res, 158, 137-144.
7. Chaabouni, S., Zghidi, N. & Mbarek, M.B. (2016). On the causal dynamics between CO2 emissions, health expenditures and economic growth. Sustainable cities and society, 22,184-191.
8. Chan, E.Y., Ho, J.Y., Hung, H.H., Liu, S. & Lam, H.C. (2019). Health impact of climate change in cities of middle-income countries: the case of China. Br Med Bull, 130(1), 5-24.

9. Crivelli, L., Filippini, M. & Mosca, H. (2006). Federalism and regional healthcare expenditures: An empirical analysis for the Swiss cantons. Health Economics, 15, 535-541.
10. Çetin, M. A. & Bakırtaş, İ. (2019). Does urbanization induce the health expenditures? A dynamic macro-panel analysis for developing countries. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, (61), 208-222.
11. Dickey, D.A. & Fuller, W.A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American Statistical Association, 74(366), 427-431.
12. Duba, J., Berry, J., Fang, A. & Baughn, M. (2018). The effects of health care expenditures as a percentage of GDP on life expectancies. Research in Applied Economics, ISSN 1948-5433, (10)2, 50-65.
13. Ecevit, E., Çetin, M. & Yücel, A.G. (2018). Türki cumhuriyetlerinde sağlık harcamalarının belirleyicileri: Bir panel veri analizi, Akademik Araştırmalar ve Çalışmalar Dergisi, (10)19, 318-334.
14. Elliott, G., Rothenberg, T.J. & Stock, J.H. (1996). Efficient tests for an autoregressive unit root. Econometrica, 64(4), 813-836.
15. Engle, F.E. & Granger C.W.J. (1987). Co-integration and error correction: Representation and testing. Econometrica, (55), 251-276.
16. Erdil, E. & Yetkiner, I. H. (2009). The Granger-causality between healthcare expenditure and output: A panel data approach. Applied Economics, 41(4), 511-518.
17. Fattahi, M. (2015). The role of urbanization rate in the relationship between air pollution and health expenditures: A dynamic panel data approach. International Letters of Social and Humanistic Sciences, 53, 68-72.
18. French, D. (2012). Causation between health and income: A need to panic. Empirical Economics, 42, 583-601.
19. Gbesemete, K.P. & Gerdtham, U.G. (1992). Determinants of healthcare expenditure in Africa: A cross-sectional study. World Development, 20(2), 303-308.
20. Gerdtham, U.G. & Löthgren, M. (2002). New panel results on cointegration of international health expenditure and GDP. Applied Economics, 34(13), 1679-1686.
21. Goldstei, B., Gounaridis, D. & Newell, J.P. (2020). The carbon footprint of household energy use in the United States. PNAS, (117)32, 19122-19130.
22. Hansen, P. & King, A. (1996). The determinants of healthcare expenditure: A cointegration approach. Journal of Health Economics, 15, 127-137.
23. Henderson, V. (2002). Urbanization in developing countries, The World Bank Research Observer, (17)1, 89–112. https://doi.org/10.1093/wbro/17.1.89.
24. Heroux, M.E., Anderson, H.R., Atkinson, R., Brunekreef, B., Cohen, A. & Forastiere, F. (2015). Quantifying the health impacts of ambient air pollutants: recommendations of a WHO/Europe project. Int J Publ Health, 60(5), 619-627.
25. Howdon, D. & Rice, N. (2018). Healthcare expenditures, age, proximity to death and morbidity: Implications for an ageing population. Journal of Health Economics, 57, 60-74.
26. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration with applications to the demand for money. Oxf Bull Econ Stat, 52(2), 169-210.
27. Khan, S. A. R. (2019). The role of renewable energy, public health expenditure, logistics and environmental performance in economic growth: An evidence from structural equation modelling. https://www.preprints.org/manuscript/201901.0102/v1, 1-18.
28. Kleiman, E. (1974). The determinants of national outlay on health. In: M. Perlman (Ed.), The Economics of Health and Medicalcare, London: McMillan, 66-88.
29. Kouassi, E., Akinkugbe, O., Kutlo, N.O. & Brou, J. M.B. (2018). Health expenditure and growth dynamics in the SADC region: Evidence from non-stationary panel data with cross section dependence and unobserved heterogeneity. International Journal of Health Economics and Management, 18, 47-66.
30. Lago-Penas, S., Cantarero-Prieto, D. & Blazquez-Fernandez, C. (2013). On the relationship between GDP and healthcare expenditure: A new look. Economic Modelling, 32, 124-129.
31. Leon, D.A. (2008). Cities, urbanization and health. International Journal of Epidemiology, 37, 4-8.
32. Magazzino, C. & Mele, M. (2012). The determinants of health expenditure in Italian regions. International Journal of Economics and Finance, 4(3), 61-68.
33. McDade, T.W. & Adair, L.S. (2001). Defining the ‘‘urban’’ in urbanization and health: A factor analysis approach. Social Science and Medicine, 53, 55-70.
34. Musgrove, P., Zeramdini, R. & Carrin, G. (2002). Basic patterns in national health expenditure. Bulletin of the World Health Organization, 80(2), 134-146.
35. Nawab, T., Afghan, M. & Muneza, C. (2021). Impact of renewable energy consumption and health expenditure on air pollutants: Implications for sustainable development in ASEAN countries. Journal of Energy & Environment, 2 (2), 78 – 89.
36. Naz, S., Page, A. & Agho, K.E. (2017). Household air pollution from use of cooking fuel and under-five mortality: the role of breastfeeding status and kitchen location in Pakistan. PloS One, 12(3), 173-256.
37. Neves, S.A., Marques, A. & Patricia, M. (2020). Determinants of CO2 emissions in European Union countries: Does environmental regulation reduce environmental pollution? Economic Analysis and Policy, (68), 114-125. DOI: 10.1016/j.eap.2020.09.005
38. Newhouse, J.P. (1977). Medical-care expenditure: A cross-national survey. The Journal of Human Resources, 12(1), 115-125.
39. Okunade, A.A. & Karakus, M.C. (2001). Unit root and cointegration tests: Timeseries versus panel estimates for international health expenditure models. Applied Economics, 33(9), 1131-1137.
40. Parkin, D., McGuire, A., & Yule, B. (1987). Aggregate healthcare expenditures and national income. Journal of Health Economics, 6, 109-127.
41. Phillips, P.C.B. & Perron, P. (1988). Testing for a Unit Root in Time Series Regression. Biometrika, 75(2), 335–346.
42. Pope III, C.A., Ezzati, M. & Dockery, D.W. (2009). Fine-particulate air pollution and life expectancy in the United States. N Engl J Med, 360(4), 376-386.
43. Rana, R. H., Alam, K. & Gow, J. (2020). Financial development and health expenditure nexus: A global perspective. International Journal of Finance and Economy, 21(26), 1050–1063. wileyonlinelibrary.com/journal/ijfe.
44. Roberts, J. (1999). Sensitivity of elasticity estimates for OECD healthcare spending: Analysis of a dynamic heterogeneous data field. Health Economics, 8, 459-472.
45. Romieu, I., Gouveia, N., Cifuentes, L.A., Junger, W., Vera, J., & Strappa, V. (2012). Multicity study of air pollution and mortality in Latin America (the ESCALA study). Res Rep (171), 5-86.
46. Samadi, A. & Rad, E.H. (2013). Determinants of healthcare expenditure in Economic Cooperation Organization (ECO) countries: Evidence from panel cointegration tests. International Journal of Health Policy and Management, 1(1), 63-68.
47. Sen, A. (2005). Is healthcare a luxury? New evidence from OECD data. International Journal of Health Care Finance and Economics, 5, 147–164.
48. Shahzad, K., Jianqiu, Z., Hashim, M., Nazam, M. & Wang, L. (2020). Impact of using information and communication technology and renewable energy on health expenditure: A case study from Pakistan. Energy, (204) 117956, 1-8.
49. Siddiqui, R., Afridi, U., Haq, R. & Tirmazi, S.H. (1995). Determinants of expenditure on health in Pakistan. The Pakistan Development Review, 34(4), 959-970.
50. Stock, J.H. & Watson, M. (1993). A simple estimator of cointegrating vectors in higher order integrated systems, Econometrica, 61, 783-820.
51. Sülkü, S. N. & Caner, A. (2011). Healthcare expenditures and gross domestic product: The Turkish case. The European Journal of Health Economics, 12, 29-38.
52. Thornton, J.A. & Rice, J.L. (2008). Determinants of healthcare spending: A state level analysis. Applied Economics, 40(22), 2873-2889.
53. Tıraş, H.H. & Türkmen, S. (2020). Sağlık harcamalarının belirleyicilerine yönelik bir araştırma; AB ve Türkiye örneği. Bingöl Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, (4)1, 107-139.
54. Toor, I.A. & Butt, M.S. (2005). Determinants of healhcare expenditure in Pakistan. Pakistan Economic and Social Review, 43(1), 133-150.
55. Tosun, C. (2018). Türkiye’de sağlık harcamalarının belirleyicileri. (Yayımlanmamış Doktora Tezi). Hacettepe Üniversitesi/Sosyal Bilimler Enstitüsü, Ankara.
56. TÜİK, (2019). TÜİK Veri Portalı. (Erişim Tarihi. 21.02.2022), https://data.tuik.gov.tr/Bulten/Index?p=Sera-Gazi-Emisyon-Istatistikleri-1990-2019-37196.
57. Ullah, I., Rehman, A., Khan, F.U., Shah, M.H. & Khan, F. (2019). Nexus between trade, CO2 emissions, renewable energy, and health expenditure in Pakistan. Int J Health Plann Mgmt.,(35)4, 818–831.
58. United Nations, (2018). Department of Economic and Social Affairs, https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html, Erişim tarihi: 15.03.2022.
59. Wang, Z. (2009). The determinants of health expenditures: evidence from US state-level data. Applied Economics, 41(4), 429-435.
60. Wang, Z., Asghar, M.M., Zaidi, S.A.H. & Wang, B. (2019). Dynamic linkages among CO2 emissions, health expenditures, and economic growth: empirical evidence from Pakistan. Environ Sci Pollut Control Ser, 26(15), 15285-15299.
61. Wang, K.M. (2011). Healthcare expenditure and economic growth: Quantile panel-type analysis. Economic Modelling, 28, 1536-1549.
62. WDI. (2021). World bank development indicators. (Erişim Tarihi: 22.03.2021), https://databank.worldbank.org/source/world-development-indicators.
63. WHO. World Health Organization. Health in the Green Economy, 2015.
64. WHO, 22 September 2021, (Erişim Tarihi: 03.02.2022), https://www.who.int/news-room/fact-sheets/detail/household-air-pollution-and-health,.
65. Wong, C.M., Vichit-Vadakan, N., Kan, H. & Qian, Z. (2008). Public health and air pollution in Asia (PAPA): A multicity study of short-term effects of air pollution on mortality. Environ Health Perspect,116(9),1195-1202.
66. Zaidi, S., Saidi, K. (2018). Environmental pollution, health expenditure and economic growth in the Sub-Saharan Africa countries: Panel ARDL approach. Sustainable Cities and Society, 41, 833-840.