IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v27y2020i20p1681-1684.html
   My bibliography  Save this article

Effects of life expectancy on economic growth: new results using the flexible Box–Cox power transformation model

Author

Listed:
  • Albert A. Okunade
  • Ahmad R. Osmani

Abstract

This article revisits the effects of life expectancy (LE) on economic growth reported in previous research. Maximum likelihhod estimates are obtained based on the monotonic nonlinear flexible Box–Cox power transformation regression model. This variance stabilizing model, unlike the a priori restrictive nested log and linear forms, is a parametrically richer flexible functional form for transforming the dependent and independent variables separately with different power parameters. The conditional LE elasticity of income estimates are found to vary across fitted models and the more robust flexible Box–Cox power model outperforms the restrictive linear and log specifications fitted in past work. Contrary to past findings indicating large negative and highly elastic (statistically significant) LE elasticity of income, new results from the preferred fully flexible Box–Cox model incorporating the nonlinear effect yield a much smaller negative (statistically significant) and inelastic LE elasticity of income estimate. The study explores some policy options for enhancing economic growth during periods of high or rising LE.

Suggested Citation

  • Albert A. Okunade & Ahmad R. Osmani, 2020. "Effects of life expectancy on economic growth: new results using the flexible Box–Cox power transformation model," Applied Economics Letters, Taylor & Francis Journals, vol. 27(20), pages 1681-1684, November.
    • Handle: RePEc:taf:apeclt:v:27:y:2020:i:20:p:1681-1684
    DOI: 10.1080/13504851.2020.1713976
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2020.1713976
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2020.1713976?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Matteo Cervellati & Uwe Sunde, 2011. "Life expectancy and economic growth: the role of the demographic transition," Journal of Economic Growth, Springer, vol. 16(2), pages 99-133, June.
    2. Daron Acemoglu & Simon Johnson, 2007. "Disease and Development: The Effect of Life Expectancy on Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 925-985, December.
    3. Durlauf, Steven N & Johnson, Paul A, 1995. "Multiple Regimes and Cross-Country Growth Behaviour," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 365-384, Oct.-Dec..
    4. Costas Azariadis & Allan Drazen, 1990. "Threshold Externalities in Economic Development," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 501-526.
    5. Camerer, Colin & Dreber, Anna & Forsell, Eskil & Ho, Teck-Hua & Huber, Jurgen & Johannesson, Magnus & Kirchler, Michael & Almenberg, Johan & Altmejd, Adam & Chan, Taizan & Heikensten, Emma & Holzmeist, 2016. "Evaluating replicability of laboratory experiments in Economics," MPRA Paper 75461, University Library of Munich, Germany.
    6. Desbordes, Rodolphe, 2011. "The non-linear effects of life expectancy on economic growth," Economics Letters, Elsevier, vol. 112(1), pages 116-118, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Qu, Yingge & Kumar, V. & Zhao, Yi, 2023. "A dynamic model of the contract length and early termination: The roles of technology evolution and pricing strategy," Journal of Business Research, Elsevier, vol. 167(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Desbordes, Rodolphe, 2011. "The non-linear effects of life expectancy on economic growth," Economics Letters, Elsevier, vol. 112(1), pages 116-118, July.
    2. Aysit Tansel & Ceyhan Ozturk & Erkan Erdil, 2021. "The Impact of Body Mass Index on Growth, Schooling, Productivity, and Savings: A Cross-Country Study," Koç University-TUSIAD Economic Research Forum Working Papers 2118, Koc University-TUSIAD Economic Research Forum.
    3. Fumagalli, Elena & Pinna Pintor, M & Suhrcke, Marc, 2024. "The impact of health on economic growth: A narrative literature review," Health Policy, Elsevier, vol. 143(C).
    4. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    5. Masagus M. Ridhwan & Peter Nijkamp & Affandi Ismail & Luthfi M.Irsyad, 2022. "The effect of health on economic growth: a meta-regression analysis," Empirical Economics, Springer, vol. 63(6), pages 3211-3251, December.
    6. Lei He & Na Li, 2020. "The linkages between life expectancy and economic growth: some new evidence," Empirical Economics, Springer, vol. 58(5), pages 2381-2402, May.
    7. Luciano Fanti & Luca Gori, 2014. "Endogenous fertility, endogenous lifetime and economic growth: the role of child policies," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(2), pages 529-564, April.
    8. Lei He & Zhengqi Wang, 2023. "The interaction effects of rising life expectancy and the public pension burden on aggregate savings and economic growth," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 22(2), pages 229-250, May.
    9. Bloom, David E. & Kuhn, Michael & Prettner, Klaus, 2018. "Health and Economic Growth," IZA Discussion Papers 11939, Institute of Labor Economics (IZA).
    10. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5, Elsevier.
    11. Elvio Accinelli & Juan Gabriel Brida, 2007. "Modelos económicos con múltiples regímenes," Revista de Administración, Finanzas y Economía (Journal of Management, Finance and Economics), Tecnológico de Monterrey, Campus Ciudad de México, vol. 1(2), pages 96-115.
    12. Scott, Andrew J., 2023. "The economics of longevity – An introduction," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    13. Annarita BALDANZI & Alberto BUCCI & Klaus PRETTNER, 2016. "The Effects of Health Investments on Human Capital and R&D-Driven Economic Growth," Departmental Working Papers 2016-17, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    14. Théophile T. Azomahou & Jalal El Ouardighi & Phu Nguyen Van & Thi Kim Cuong Pham, 2006. "Estimation semi-paramétrique de la convergence des régions européennes," Economie & Prévision, La Documentation Française, vol. 0(2), pages 97-110.
    15. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2008. "Empirics of Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 3, Edward Elgar Publishing.
    16. Zhang, Xiaobei & Wang, Xiaojun, 2021. "Measures of human capital and the mechanics of economic growth," China Economic Review, Elsevier, vol. 68(C).
    17. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
    18. Stöllinger, Roman, 2013. "International spillovers in a world of technology clubs," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 19-35.
    19. Castellacci, Fulvio, 2008. "Technology clubs, technology gaps and growth trajectories," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 301-314, December.
    20. Shana M. Sundstrom & Craig R. Allen & David G. Angeler, 2020. "Scaling and discontinuities in the global economy," Journal of Evolutionary Economics, Springer, vol. 30(2), pages 319-345, April.

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:27:y:2020:i:20:p:1681-1684. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.