The Impact of Residential Combustion Emissions on Health Expenditures: Empirical Evidence from Sub-Saharan Africa

Residential combustion of fuels, especially solid, for cooking, heating and other activities generates high level emissions that considerably contribute to indoor and outdoor air pollutants concentrations, which adversely affect human health and are likely to influence heath expenditures. We used the system General Method of Moments (GMM) technique to examine the role of residential combustion (proxied by: particulate matter (PM2.5), carbon monoxide (CO), nitrogen oxide (NOx) and sulphur dioxide (SO2) emissions) in determining health expenditures while controlling for ambient air pollutants emissions from the other categories such as transportation, manufacturing industries and construction, and others. We employed data covering the period 1995-2010 in 44 countries of Sub-Saharan Africa (SSA). Health expenditures are categorized into per capita, public and private out-of-pocket; and we run three separate regressions according to the categories. The findings indicate that residential sector combustion was significantly associated with higher health expenditures, especially the out-of-pocket compared with other categories. Moreover, PM2.5 is found to have the highest impact on health expenditures. The implementation of effective public health and environmental health policies that encourage the access and use of cleaner fuels or improved cook stoves in SSA would be associated with not only a reduction in healthcare expenditures but also with other health and socio-economic benefits.