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Global Health Econ Sustain Prolonged impact of health-care expenditure on poverty

150 million by 2021 (World Bank, 2020). In addition, the countries were utilized. The poverty ratio of USD $1.90
WHO 2003 encourages spending on healthcare and sets a day (2011 purchasing power parity [PPP]) (% of the
goals to guarantee that. Increasing financial resources population) is the standard for poverty measurement set by
for health should be a priority, and without spending on the World Bank, varying according to the country’s income
health, low-income countries will not be able to achieve the level (lower or middle income). Simultaneously, health
health-related Millennium Development Goals. A study expenditure as a percentage of GDP was employed based on
by Murthy and Okunade (2009) states that spending on World Bank standards. The data utilized in this study were
health in the African countries under consideration is annual data from 2000 to 2018, totaling 380 observations,
considered essential, and spending on health from foreign retrieved from the World Bank’s official website. This
loans has worked to revive the economy. Meanwhile, Amiri dataset was analyzed to examine the short- and long-run
& Ventelou (2012) conclude in their paper that there is a causal relationship between poverty rate and healthcare
bidirectional relationship between health-care expenditure expenditure in low- and middle-income countries.
and gross domestic product (GDP) in the Organization for The poverty rate is measured by the World Bank Group’s
Economic Cooperation and Development countries. The international poverty line of $1.90/day in 2011 PPP, which
following studies show that poor countries spend more out- is based on a set of national poverty lines. This international
of-pocket (OOP) on health than developed countries and poverty line was originally set at $1.25/day in 2005 PPP.
that this has catastrophic effects on poor people. Kronenberg Extreme poverty is defined as the number of people living
and Barros (2014) revealed that disasters caused by OOP on <$1.90/day. The last official estimate of global poverty
healthcare payments are a major problem in Portugal. was in 2017. The health expenditure indicator, determined
To prevent vulnerable groups from facing catastrophic by the World Bank, estimates current health expenditures,
spending on healthcare, exemptions from OOP expenses including health-care goods and services consumed annually.
on medical care should be implemented. Amiri & Ventelou This indicator does not include capital health expenditures.
(2012) state that personal expenditures are prevalent in the
least developed countries; the poorer the country, the higher 2.1. ARDL bounds test
the amount that must be paid OOP (93% in low-income In this analysis, we utilized the ARDL bounds test approach
countries; about 85% in middle-income countries; 56% in proposed by Pesaran et al. (2001). The ARDL bounds test
high-income countries). Moreover, a study by Hallegatte approach is an expansion of ARDL, as shown by Pesaran
et al. (2020) concludes that there is a bilateral relationship et al. (1997;1999). The ARDL bounds test demonstrates
between disaster risk management and poverty. Therefore, permits for level relationships to be inspected, whether the
this paper discusses the effects of diseases as disaster factors factors are I(0), I(1), or not commonly cointegrated, despite
leading to poverty. Another study by Patel et al. (2020) the fact that carrying out any pre-testing is unconditioned
explains the socioeconomic variables and their interaction (Pesaran et al., 2001; De Boef & Keele, 2008). In this
with health situations. It found that several factors are regard, the augmented Dickey-Fuller (ADF) test proposed
associated with poverty and low access to healthcare, such by Dickey and Fuller (1979), is a statistical significance
as increased exposure to the virus, tension, and age, which test that yields findings for hypothesis testing including
make COVID-19 particularly challenging as potential null and alternative hypotheses (Salim & Rafiq, 2012).
causal mechanisms.
The ARDL bounds test strategy determines if any level
In conclusion, the multifaceted nature of the relationship of relationship exists. If the F-statistic and t-statistics are
between poverty and health-care expenditure, pandemics, more significant than the lower and upper bounds of 1%,
disasters, and socioeconomic variables necessitates a 5%, and 10%, then both an error correction model (ECM)
comprehensive approach. Addressing poverty requires not and a short-run ARDL can be indicated (Pesaran et al.,
only increased healthcare funding but also measures to mitigate 2001). However, if the F- and t-statistics of the bounds test
OOP expenses, improve disaster risk management, and tackle demonstrate that they are lower than the lower and upper
socioeconomic disparities. Policymakers must adopt holistic bounds, a short-run ARDL can be indicated.
strategies to break the cycle of poverty by integrating health n n
policies, disaster resilience, and targeted socioeconomic ∆ + ∑ β ∆P = β P t i − ∑ δ ∆HE +ϕ P (I)
+
interventions that uplift vulnerable populations and promote t 0 i i t i− 1 t−1
τ
equitable access to health-care services. +ϕ 2 HE i − t−1 + µ t ti −
2. Methods n n
+
For the purpose of this study, data on the poverty rate ∆ t 0 + ∑ β i ∆P = β P t i − ∑ δ i ∆HE t i − +ϕ Z t−1 + µ t (II)
and health-care expenditures of low- and middle-income τ i − ti−

Volume 2 Issue 1 (2024) 3 https://doi.org/10.36922/ghes.2383