Impact of Income Inequality on Health Status in South Asian Countries: A Panel Data Analysis

Nisar Ahmad, Shahbaz Khan
International Journal of Economics and Business Administration, Volume IX, Issue 2, 205-219, 2021
DOI: 10.35808/ijeba/698

Abstract:

Purpose: This study aims to analyze the impact of income inequality on health status in South Asian countries. These countries are Pakistan, India, Bangladesh, Sri Lanka, and Nepal. Design/Methodology/Approach: Fixed Effect Model is employed to find the impact of income inequality on these countries' health status using panel data from 1998 to 2017. The data is taken from the Standardized World Income Inequality Database, United Nations Educational, Scientific and Cultural Organization database, and World Development Indicators database. Finally, the Hausman test is used to differentiate between the Fixed and Random Effect Models. Findings: The findings of the study show that health is negatively affected by income inequality. Income and education have a significant impact on health status in this region. Further, results show that males are more affected by income inequality than females, and an increase in per capita income has more effect on female health status than males. It is revealed that education has more effect on female health condition as compared to male. The mean life expectancy of a male in this region is slightly higher than that of females. The outcome of the analysis explains that the coefficient value of education and income inequality is higher than income. Practical Implications: The unequal distribution of income has immense harmful effects on health. Health is the fundamental need of human beings, and it has effects on each activity of the individual. The increasing level of income inequality and its effects on health is a big challenge for South Asian countries. Reduction in income inequality is practically desirable. Originality: This research study explains an original empirical analysis based on panel data obtained from the World Development Indicators database for five South Asian countries.


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