A Cross Country Analysis of the Nexus among Economic Growth, Health Outcome and Environmental Degradation

Abstract

This paper examines the nexus among economic growth, health indicators and some selected environmental variables for South East Asian countries. The society and the environment are inseparable part of any economy. While the very existence of human race and society depends on and within the environmental and economic condition of the country. There has been a spate of recent research which derives econometric relationships between income, health and various indicators of environmental quality. The observation of an environmental Kuznets curve (EKC) for different environmental indicators has led to a variety of conclusions about the overall economic growth and environment relationship. While environment and income are seen to have an inverted-U shaped relationship (Environmental Kuznets Curve (EKC) hypothesis, it has already been recognized that environmental factors can also affect human health positively. Population explosion of 21^st century has created huge pressure on environment and various other economic activities of human beings have further increased the exploitation of natural resources. The objective of this study is to identify how environmental degradation varies with economic growth and social condition. For this we construct a simultaneous equation model and a combined environmental degradation index (EDI) from the available secondary data on World Bank website for nine selected South Eastern countries and also check whether health outcomes situation of a country is affected due to environmental degradation (EDI) and economic growth by constructing an index for selected health quality Index (HI). The study tries to focus on possible correlation between a set of socio-economic dimensions and ambient environmental aspects that affect wellbeing of the society and sustainable development of the economy. The results of the empirical analysis emphasis on the fact that there exists two-way relationship between different developmental and environmental aspects in case of the selected developing countries of the South East Asia. Research findings in this regard would be a useful policy instruments towards sustainability of both, the environment and the health sector of the economy.