Environmental pollution and the nonlinear effect of GDP per capita on health expenditures: Dynamic study for Oil exporting countries

In recent years, the increasing growth in health expenditures has led to the recognition determinants of health expenditures be considered by researchers. According to studies, GDP and the emission of pollution are the important determinants of health expenditures. In this study, the effect of CO2 emission as an environmental indicator, GDP per capita as an economic indicator, urbanization rate and age dependency ratio as social indicators on health expenditures per capita has been estimated through use of the Panel Generalized Moments Method (PGMM) and the nonlinear relationship approach between income per capita and health expenditures per capita in 19 Oil Exporting countries including Iran in the period 2004 - 2018. The findings reveal that the variables of carbon dioxide emission per capita, urbanization rate and age dependency ratio have positive and significant effect and GDP per capita has a nonlinear inverted U-shaped relationship with health expenditure. This nonlinear relationship suggests that increment in GDP per capita leads to an increase in health expenditures per capita until the threshold level, and after that, this increment can lead to a reduction in health expenditures.