Impact of pollution level, death rate and illness on economic growth: evidence from the global economy

The present study focuses on the impact of pollution, death rate and illness on GDP growth rate resulting from the outside pollutants PMP, OZ and HAP across the globe in 164 countries. To do so, the study first normalizes and standardizes the data by creating three composite indexes for pollution, death rate and illness [Disability Adjusted Life Years (DALYs)]. Then, the study involved running different panel regressions to derive the conclusions. Panel regression estimations show that the effects of pollution, deaths and illness on GDP growth rate resulting from these outside pollutants, PMP, OZ and HAP, across the globe for 164 countries are not uniform and different models such as pooled, fixed and random effect panel models yield different results. Hausman test results show that for eight out of nine cases the fixed effect model is found to be statistically significant. Further fixed or random cross-sectional effects analysis for 164 countries show that the fixed or random cross-sectional effects vary in between a large range of 12 to − 26 among these 164 countries. The study’s findings have several important implications for policymakers and decision-makers for framing policies with respect to the study variables across the globe.