Exploring the Relationship Between Previous Year Health Expenditures and COVID-19 Deaths: A country-level analysis



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When the COVID-19 pandemic hit the world, a quest to understand the virus in order to find an effective solution increased interest in the factors contributing to a greater number of deaths. The factor of health expenditure seemed to be an important determinant of health status and economic development of a nation from the evidence of several research papers. This was true especially in poor and developing countries, where public health expenditures fell short. So, it was inferred that it should have an effect on COVID-19 deaths as well. With this in mind, this research used a multivariate regression model comprising over 200 countries with the cumulative COVID-19 deaths as the dependent variable and health expenditures as the independent variable. The controls that were used include population, GDP, share of population above 65 years of age, share of urban population and prevalence of tobacco use. I find that for the main multivariate regression model, the outcome of focus, health expenditure was positive and not statistically significant. The coefficient for the share of population over 65 was however positive and statistically significant, and so were the prevalence for tobacco use and share of urban population. For my second set of models, I divide the countries into low, middle and high income groups. I find that the health expenditure has a negative relationship with COVID-19 deaths for the low income countries, although it is still not statistically significant. For the high and middle income countries, the coefficients are still positive. For countries in the middle-income group, the relationship isn’t significant but for the high-income group, the relationship is significant at the 0.1 level (p<0.1). Additionally, I also perform a regression analysis of the external health expenditures and COVID-19 death rates in low and middle-income countries. I find that there is a negative relationship between external health expenditures and COVID-19 deaths, but it is not significant.



Economics, Covid-19