INCOME-HEALTH NEXUS: PANEL COINTEGRATION AND CAUSALITY EVIDENCE

Özet

This study examines the relationship between the GDP per capita and infant mortality rate in 13 CEE countries over the period from 1995 to 2017 by means of panel cointegration and causality methods. We find that there is a cointegration when the infant mortality rate as dependent and GDP per capita as independent variable. Our estimates indicate that a 1 percent increase in GDP per capita leads to 0.19 percent reduction in infant mortality rates in the long run. However, we don’t find any evidence for a cointegrating relationship when the GDP per capita is the dependent and infant mortality rate is the independent variable. Finally, there is a unidirectional causality running from GDP per capita to infant mortality rate. Therefore, this study highlights the importance of income to reduce the infant mortality rate and present evidence for the argument that wealthier is healthier in a sense.