This study examines the effect of recurrent and capital health expenditure on life expectancy in Nigeria over the period 1990–2023, addressing a persistent puzzle in the health economics literature: the apparent disconnect between rising health spending and modest longevity gains in Nigeria despite decades of policy reform. Anchored theoretically in Grossman's Human Capital Theory and Health Production Function Theory, alongside Romer's Endogenous Growth Theory, the study estimates the elasticity of life expectancy with respect to recurrent health expenditure (RHE) and capital health expenditure as a share of GDP (CHE%GDP), controlling for real GDP per capita. Using annual time-series data (N = 34) sourced from the World Bank's World Development Indicators, the Central Bank of Nigeria Statistical Bulletin, and the WHO Global Health Expenditure Database, the study applies the Autoregressive Distributed Lag (ARDL) bounds-testing approach of Pesaran, Shin, and Smith (2001), following confirmation via ADF, Phillips–Perron, and KPSS tests that all series are integrated of order one, I(1). The bounds test yields a computed F-statistic of 12.191 (p = 2.71 × 10⁻⁸), decisively rejecting the null of no long-run relationship among life expectancy, health expenditure, and income. The estimated long-run coefficients are correctly signed recurrent expenditure (+0.298) and capital expenditure (+0.419) consistent with theoretical priors, though neither reaches conventional statistical significance, and the error correction term, while negatively signed (−0.0105), implies an implausibly slow speed of adjustment and is itself statistically insignificant. The model passes the full battery of diagnostic tests (serial correlation, heteroskedasticity, normality, functional form, and parameter stability). The study concludes that a genuine long-run relationship between health expenditure and life expectancy in Nigeria is well supported, but that thirty-four years of annual national-level data are insufficient to pin down its precise magnitude and dynamics with statistical confidence a substantive methodological finding in its own right. The study recommends sustained recurrent and capital health investment, improved public data infrastructure at higher frequency, and larger-scale state-level panel studies to sharpen precision in future research.
- Quote paper
- Peter Ellah (Author), 2026, Effect of Health Expenditure on Life Expectancy, Munich, GRIN Verlag, https://www.grin.com/document/1749045
