Income-health nexus in Sub-Saharan Africa: Evidence from heterogeneous panel models

Abstract

An attempt is made in this research to examine the relationship between income and health by testing the Absolute Income-Health Hypothesis (AIH). The study primarily focuses on 34 Sub-Saharan Africa (SSA) countries for the period of 2001-2016. The data for the study were mainly sourced from World Development Indicators (WDI) and the World Health Organization (WHO) Global Health Observatory Data Repository. Using heterogeneous slopes modelling set-up that incorporates series of non-stationarity, cross-section dependence, and group-specific trends, we failed to find evidence in support of the AIH. Our empirical outcome cast doubts on the robustness of previous studies that ignored such modelling attributes, while we deduced that methodology matters in analysing income-health nexus and testing the validity of the AIH for cross-section of countries. By contrast, we find income to be an insignificant determinant of health in SSA compared to health spending and improved sanitation.