Health, environment, and sustainable development: evidence from panel data from ASEAN countries

The paper explores empirically the nexus of environmental quality, measured by carbon dioxide (CO₂) emissions, and human-health-capital formation, using covariates: real gross domestic product (GDP) per capita, inflation, and unemployment rate. This study uses a health expenditure approach and data from a panel of seven ASEAN countries from 1995 to 2020 within the health production function framework. The method of fully modified ordinary least squares (FMOLS) is implemented to estimate the long-run parameters and the Dumitrescu-Hurlin (Econ Model 29:1450–1460, 2012) test for the direction of causality. The empirical results reveal that high CO₂ emissions raise health expenditure as do inflation and unemployment rate. While rising income makes higher healthcare costs affordable, this fact might persuade policymakers to adopt measures to cut CO₂ to improve human-health-capital formation and thus to support long-run sustainable economic growth through healthy human capital formation.