Health expenditure is vital for individuals and the state, reflecting a common concern for well-being, productivity and societal health. This study examines the factors that influence health expenditure in the context of environmental pollution, economic growth, ageing population, and educational attainment in the Gulf Cooperation Council (GCC) countries. It utilizes data from 2000 to 2022 for a panel of six nations and employs the augmented mean group (AMG) estimation, which is further cross-examined by the correlated common effects mean group (CCEMG) estimation and the Dumitrescu–Hurlin (D-H) Granger non-causality test. The AMG estimation findings reveal that CO2 emissions significantly increase healthcare spending in the GCC nations, while economic growth helps mitigate it; education has no significant impact, and the small elderly population reflects ageing as an insignificant factor. This highlights an ageing pattern that diverges from global trends but mirrors regional realities. The robustness assessments, as determined by the CCEMG estimation and the D-H Granger non-causality test, also validate the AMG estimation outcomes. Our findings have important policy implications for policymakers that the GCC nations should strengthen environmental regulations, invest in green technologies, raise public awareness, integrate pollution data into health planning, enhance regional cooperation, leverage economic growth to improve healthcare efficiency, and reassess educational programmes to better influence health behaviours and spending.
AliA. A., & SayedM. N. (2020). Determinants of healthcare expenditures in GCC countries: A panel data analysis. Journal of Asian Finance Economics and Business, 7(8), 705–714. https://doi.org/10.13106/jafeb.2020.vol7.no8.705
2.
AmiriM. M., KazemianM., MotaghedZ., & AbdiZ. (2021). Systematic review of factors determining health care expenditures. Health Policy and Technology, 10(2), 100498. https://doi.org/10.1016/j.hlpt.2021.01.004
3.
BarkatK., SbiaR., & MaouchiY. (2019). Empirical evidence on the long and short-run determinants of health expenditure in the Arab world. Quarterly Review of Economics and Finance, 73, 78–87. https://doi.org/10.1016/j.qref.2018.11.009
4.
BlomquistJ., & WesterlundJ. (2013). Testing slope homogeneity in large panels with serial correlation. Economics Letters, 121(3), 374–378.
5.
DumitrescuE. I., & HurlinC. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(4), 1450–1460.
6.
EberhardtM., & BondS. (2009). Cross-section dependence in nonstationary panel models: A novel estimator [MPRA paper, No. 17692, University Library of Munich]. https://www.mpra.ub.uni-muenchen.de/17692
7.
EberhardtM., & TealF. (2010). Productivity analysis in global manufacturing production. University of Oxford Discussion Paper Series, 515, 1–32. http://www.economics.ox.ac.uk/research/WP/pdf/paper515.pdf
8.
FarahatA. (2022). Chapter 10–Air quality in the Gulf Cooperation Council (GCC) countries. In SinghRamesh P. (Ed.), Asian atmospheric pollution (pp. 201–226). Elsevier. https://doi.org/10.1016/B978-0-12-816693-2.00013-5
9.
FledsbergS., SvenssonM., & JohanssonN. (2023). Lifetime healthcare expenditures across socioeconomic groups in Sweden. European Journal of Public Health, 33(6), 994–1000.
10.
FuruokaF., LimB. F. Y., KokE., HoqueM. Z., & MunirQ. (2011). What are the determinants of health care expenditure? Empirical results from Asian countries. Sunway Academic Journal, 8, 12–25. https://core.ac.uk/outputs/148366622/?utm_source=pdf&utm_medium=banner&utm_campaign=pdf-decoration-v1
11.
GetzenT. E. (2017). The growth of health spending in the USA: 1776 to 2026. http://dx.doi.org/10.2139/ssrn.3034031
12.
IslamM. S. (2020a). Human capital formation and economic growth in South Asia: Heterogeneous dynamic panel cointegration. International Journal of Education Economics and Development, 11(4), 335–350.
13.
IslamM. S. (2020b). Human capital and per capita income linkage in South Asia: A heterogeneous dynamic panel analysis. Journal of the Knowledge Economy, 11(4), 1614–1629.
14.
Kallestrup-LambM., MarinA. O. K., MenonS., & SøgaardJ. (2024). Aging populations and expenditures on health. The Journal of the Economics of Ageing, 29, 100518. https://doi.org/10.1016/j.jeoa.2024.100518
15.
KeaX., SaksenaaP., & HollyA. (2011). The determinants of health expenditure: A country-level panel data analysis [Working paper, World Health Organization, Geneva, Switzerland].
16.
KhraisI., & SuleimanA. M. A. (2024). Healthcare expenditure and its impact on economic growth: A case study of Jordan. In HannoonA. (Ed.), Frontiers of human centricity in the artificial intelligence-driven society 5.0. studies in systems, decision and control (Vol. 226, pp. 917–932). Springer. https://doi.org/10.1007/978-3-031-73545-5_81
17.
KraipornsakP. (2017). Factors determining health expenditure in the Asian and OECD countries. Economics World, 5(5), 407–417. https://doi.org/10.17265/2328-7144/2017.05.003
18.
LeeR. D. (2014). Macroeconomic consequences of population aging in the United States: Overview of a National Academy report. American Economic Review, 104(5), 234–239. https://doi.org/10.1257/aer.104.5.234
19.
LiL., DuT., & ZhangC. (2020). The impact of air pollution on healthcare expenditure for respiratory diseases: Evidence from the People’s Republic of China. Risk Management and Health Policy, 24(13), 1723–1738. https://doi.org/10.2147/RMHP.S270587
20.
Marmore. (2017, October15). GCC air quality: Are government measures sufficient?. https://www.marmoremena.com/en/insights/gcc-air-quality-are-government-measures-sufficient/?utm_source=chatgpt.com
21.
MasonC. N., & MillerT. (2018). International projections of age-specific healthcare consumption: 2015–2060. The Journal of the Economics of Ageing, 12, 202–217.
22.
MoayedfardA., GhorbaniS., & SefiddashtiE. S. (2020). Health expenditure and its human capital determinants in Iran. Iranian Journal of Public Health, 49(11), 2189–2193. https://doi.org/10.18502/ijph.v49i11.4737
23.
PesaranM. H. (2004). General diagnostic tests for cross-section dependence in panels [IZA Discussion Paper No. 1240].
24.
PesaranM. H. (2006). Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74, 967–1012.
25.
PesaranM. H. (2007). A simple panel unit root test in the presence of cross-section dependence. Journal of Applied Econometrics, 22(2), 265–312.
26.
PesaranM. H., SmithV., & YamagataT. (2009). Panel unit root tests in the presence of a multifactor error structure [Unpublished working paper, Cambridge University].
27.
PesaranM. H., & YamagataT. (2008). Testing slope homogeneity in large panels. Journal of Econometrics, 142(1), 50–93. https://doi.org/10.1016/j.jeconom.2007.05.010
28.
PhiG. (2017). Determinants of health expenditures in OECD countries [Unpublished graduate thesis, Bryant University, Rhode Island].
29.
PiscopoJ., GrootW., & PavlovaM. (2024). Determinants of public health expenditure in the EU. PLOS ONE, 19(3), e0299359. https://doi.org/10.1371/journal.pone.0299359
30.
RaghupathiV., & RaghupathiW. (2020). The influence of education on health: An empirical assessment of OECD countries for the period 1995–2015. Archives of Public Health, 78, 20. https://doi.org/10.1186/s13690-020-00402-5
31.
ScalamontiF. (2025). Empirical evidence on the determinants of health expenditure in the MEDA region. http://dx.doi.org/10.2139/ssrn.5111946
32.
UNDP. (2024). Human development reports, all composite indices and components time series (1990–2022) metadata. https://hdr.undp.org/data-center/documentation-and-downloads
33.
World Bank. (2024). World development indicators. https://databank.worldbank.org/source/world-development-indicators#
34.
XiaF., XingJ., XuJ., & PanX. (2022). The short-term impact of air pollution on medical expenditures: Evidence from Beijing. Journal of Environmental Economics and Management, 114, 102680. https://doi.org/10.1016/j.jeem.2022.102680
35.
YassinJ., & AralasS. (2019). The analysis of health expenditure determinants in selected Asian countries: Do environmental externalities matter for health expenditure?International Journal of Economics and Management, 1(3), 51–58.
36.
YetimB., İlgünG., ÇilhorozY., DemirciŞ., & KoncaM. (2020). The socioeconomic determinants of health expenditure in OECD: An examination on panel data. International Journal of Healthcare Management, 14(4), 1265–1269. https://doi.org/10.1080/20479700.2020.1756112
37.
ZhouL., Ampon-WirekoS., Asante AntwiH., XuX., SalmanM., Opuni AntwiM., & Norvienyo AfuaT. M. (2020). An empirical study on the determinants of health care expenses in emerging economies. BMC Health Services Research, 20, 774. https://doi.org/10.1186/s12913-020-05414-z
