Health Expenditure , CO 2 Emissions , and Economic Growth : China vs . India

Researchers’ attention has been turned on Health expenditure, Carbon emissions, and economic growth as they play a focal role in the current debate on environmental protection and sustainable development. Our paper endeavors to investigate the impact of economic growth and CO2 emissions on Health expenditure for two main countries in Asia (China and India) using a dynamic panel data model estimated employing the Generalized Method of Moments (GMM) for the period 1960–2019. Our empirical results show that there is a significant relationship between health expenditure, CO2 emissions, and economic growth. The empirical evidence indicates a significant positive impact of CO2 emissions on health expenditure whiles economic growth has a negative impact on health e xpenditure for both countries for the period under study. The population growth rate has transposed effect on India's health spending; on the other hand, its impact on China’s health spending is significantly positive. The strong observable correlation between health expenditure and economic growth is crucial for economic development.


Introduction
In recent decades, the relationship between a deteriorating environment, economic growth, and healthy spending has gained increasing attention in the literature. This relation is in three testable phases: unidirectional, feedback, and neutrality hypothesis . Fogel (2004) argued that 30 % of economic growth in England for the last two decades is connected to the enhancements in nutrition and health of its' populaces' (Fogel, 2004).
It is unchallengeable that there has been enormous research addressing either health expenditure with C02 or health expenditure with economic growth, nevertheless, a mixed effect of health expenditure and CO2 with healthcare spending is still unexplored. Our article aims to fill this research gap by investigating both health expenditure and CO2 emissions impl ications for economic growth. Health is one of the most important factors to decide the quality of human capital whiles C02 emission causes climate change, which affects public health care and total production (GDP) (Abdullah et al, 2016). Quality human capital promotes economic growth. Therefore, there the need to investigate what potentially causes harm (CO2 emissions) to quality of life among all living things and how it changes productivity (economic growth) and the cost associated with maintaining quality health-care (health care expenditure) (Portney, 2013).
This paper is to shed light on the causal relationship between CO2 emissions, health expenditures, and economic growth in China and India for the reason that not as much attention has been paid to from the nexus between the environment, health expenditures, and economic growth by academics.

Research questions
1. Do C02 emissions significantly affect Health expenditure?
2. Does economic growth has a significant impact on Health expendit ure 3. What is the relationship between C02 emission and economic growth?
From our hypothesis, we come out with, a multi-directional hypothesis represented by the diagram.

Multi-Directional Hypothesis Framework
Author's design 2020 As projected by academics economic development is also causing environmental degradation, as carbon dioxide is one of the greenhouse gases that is considered to be the main cause of global warming and environmental degradation. Hypothesis H1 to H3 looks at the correlation that the three variables have with each other. We exploit the direct effect, indirect effect, and the reverse effect using econometrics analysis.

Study site
Our study centered on the case of China and India with a population size of 1.4 billion population and 1.393 billion respectively. These two countries are the most populous in the world and they are neighbors (Paul & Mas, 2016

Literature
The purpose of this study was to demonstrate the interaction between CO2 emissions, health Expenditure, and economic growth in China and India. The pairwise correlation variables between the primary studies will be discussed. and other chemicals, as their main sources of energy leading to production and the magnification of the C02 externalities on public health (Lovins, 2013).

Health Expenditures versus Economic Growth
Experts say that the effective consumption of energy resources involves a higher l evel of economic growth (Bilen et al., 2008). However, the financial benefits that we enjoy today out of According to Saidi and Hammami (2015), economic growth has a positive influence on energy consumption and is statistically significant (Saidi & Hammami, 2015). Halicioglu  In general, these studies argue that there is a need to understand the dynamic env ironment and its impact on economic conditions and public healthcare.
gHi,t = β0 + β1gGDPi, t + β2 gCO 2 i, t + β3FDi, t +β4gKi,t + β5gPOPi,t + β6 gLi,t + εi,t We can also divide both provided by population and get each series in per capita terms: gHi,t = β0 + β1gHt-1, t + β2gGDPi, t + β3 gCO2i, t + β4FDi, t +β5gKi,t + β6gPOPi,t + εi,t where i represents country (in our study, we have 2 countries); t represents time (our time frame is 1960-2019); gGDP represents the economic growth rate of per capita, gH represents the Health Expenditure of per capita GDP, gCO2 the growth rate of per capita CO2 emissions, gK represents the growth rate of capital stock, and gPOP represents the growth rate of population.      When it comes to assessing the two countries, the GMM model is perfect because the adjusted R-square explains 99.5% of the model specification indicating that the model is a good specification.

Results and Discussion
The value of Ht−1 (−0.590) implies that between the two countries health spending is adjusted by 5.90% each year. We ascertain that economic growth has negative and statistically significant effects at a 5%   The R-squared and the Adjusted R-squared in Table 4 explained how well the model explains the dependent and the independent variab le. The Adjusted R-squared is 0.995, which means that it explains 99.5 percent of the link among the variables. These results indicate that the dynamic Health expenditure model is a good specification. The results of China are reported in Table 4. The one year lagged value of health expenditure Ht−1 (1.141) suggests that health expenditure is improved by 11.41% each year. We find that economic growth proxy in Table 4  paribus. An increase in population by 1% will trigger a 34.3% increase in health care expenditure directly and or indirectly by 34.3%. The adjusted R-square and the R-square show the model can explicate more 95% of the model specification. Table 5 contains the statistical result for India. The value of the one yea r lagged health expenditure Ht−1 (−0.590) implies that health expenditure of India is amended by 0.590 percent each year. We find that GDP per capita has negative and statistically significant effects at a 5% level on Health expenditure. The coefficient of economic growth is 0.583 implying that a 1% increase in the growth rate of the GDP per capita conversely affects health expenditure by 0.583 % for India. In the case of CO2 emission, it has a positive and statistically significant effect on health expendi ture and statistically significant at the 10% level. A 1% increase in CO2 emissions is expected to rise by 7.78%.  The results concerning the effects of CO2 emissions and economic growth on health expenditure for the three sections are summarized in Table 6. First, we discovered that economic growth negatively

Conclusion
Even though the literature on health expenditure, CO2 emissions, and economic growth has improved over the last few years, no study has examined the effect of economic growth and CO2 emissions on Health expenditure using a growth framework and dynamic equa tion models. The results are based on data from 1960 to 2019. We have examined this effect not only on a single country analysis but also on combined country -analysis.
Our results show that the effect of economic growth on health expenditure use is negati ve and statistically significant in China and India. Meaning, holding all other things constant, in china economic growth and health expenditure move in opposite directions. This suggests that even though these countries (China and India) are achieving mas sive economic growth, less attention has been paid to the health care of its citizens. We justify this by the fact that the one year lagged health expenditure coefficient is negative for both countries in all three panels.
Carbon dioxide emissions have a positive and statistically significant effect on health expenditure. Inferring that more harmful substances are being released in the atmosphere, causing The empirical review indicates that the population growth rate of India to exceed its health system improvement widening the gap of the number of house to a health facility. We recommended that India authorities work on its health system to march up with its population because our result indicated a negative influence between India's population and health expenditure. Chiefly, the role of the private sector in health should be upgraded so that th e health expenditure can have a positive contribution to the economic development of India.