The Impact of Institutional Quality, Air Pollution and Health Expenditures on Health: A Panel Threshold Approach

In addition to health costs, institutions are a factor influencing directly and indirectly the promotion of health in a country. Air pollution, the main cause of which is the industry and in the control and reduction of which the governments have an important role, is another important factor affecting the health situation in a country. This paper reports the results of a study on the health impact of institutions, considering health costs and air pollution.

The impact of institutions on health in 38 developing countries during the period 2006-2018 was determined using the threshold panel method, health proxy life expectancy index and good governance index as the quality of institutions and explanatory variables of misery, per capita income, health costs and happiness. Based on the CO2 threshold variable, the sample was divided into two homogeneous regimes and the model was obtained with EVIEWS (10) and Stata (15) software packages.

The findings indicate that the governance index and happiness in both regimes are significantly positive. Health costs in the upper group were found not to be significant and in the lower group to have little effect on health. In addition, income was significant in both regimes, though with little effect. Finally, the misery index was also found to be significant, but its coefficient in the lower group was not in line with the relevant theories.

Based on the findings of this study, institutions in developing countries play a major role and form a causal chain among other sectors which are very important in promoting health of the populations. Therefore, in order to promote health in these countries policies should be designed and implemented for institutional improvements.