Energy poverty and health expenditure: Evidence from Ghana

Drawing on data from the seventh round of the Ghana Living Standard Survey (GLSS 7), we examine the effect of energy poverty on household health expenditures. Further, we analyse the mediating role of health insurance and remittances in the link between energy poverty and health expenditure. Employing a heteroscedastic double-hurdle estimation model, we find that energy poverty increases household health expenditures. Our results also suggest that the negative effect of energy poverty on household health expenditures is significantly reduced through health insurance and remittances. Using Oster's (2014) bounds approach, we demonstrate that our results are robust to omitted variable bias. The policy implications from the findings suggest that broadening the scope of national health insurance while eliminating barriers that hinder the inflow and receipt of remittances by households are key to achieving optimal health outcomes.

Automated summary

The study shows that energy poverty increases household health expenditures, but this negative effect can be significantly reduced through health insurance and remittances. Therefore, expanding the scope of health insurance and eliminating barriers to remittances are crucial for achieving optimal health outcomes.