Public health spending, macroeconomic uncertainty and health outcome: New evidence from Nigeria

Abstract

This study aims to examine the effect of public health spending and macroeconomic uncertainty on health outcome in Nigeria. The autoregressive distributed lag (ARDL) model was the method used to analyze the objectives of the study, as there were mixture of both level (I(0)) and first difference (I(1)) series. Conditional variance from the Generalized Autoregressive Conditional Heteroscedasticity (GARCH) model was used to proxy macroeconomic uncertainty, using inflation rate as the main macroeconomic variable. Annual time series data on public health expenditure and health outcome indicators used for this study ranges between 1981 to 2020. Monthly time series which ranges between the period of January 1981 and December 2020 for inflation was used to derive macroeconomic uncertainty using the GARCH model. The estimation result shows, that public health expenditure and macroeconomic uncertainty does not have a significant impact on health outcome in the short run and long run. Finally, public income was identified as the most important determinant of health outcome in Nigeria both in the long and short run and is positively related to the health outcome. Results obtained shows that as public income increases, life expectancy rate is expected to improve and infant mortality rate will reduce. The study recommends that the Nigerian governments should efficiently allocate public health expenditure and implement welfare enhancing policies in order to improve the income level and well-being of households.

Keywords:

Keywords: Expenditure, health outcome, infant mortality rate, life expectancy rate, macro-economy, public health, uncertainty

JEL Classification Codes: C51, H51, I10, I12, I15, I18