MODELLING THE IMPACT OF HEALTH ON ECONOMIC GROWTH: REVISITING THE CONCEPT OF THE PRESTON CURVE

Dr.Rajeshwari U R; Ms.Gargi Lakshmi Sridharan

Volume : VI, Issue : X, October - 2016

MODELLING THE IMPACT OF HEALTH ON ECONOMIC GROWTH: REVISITING THE CONCEPT OF THE PRESTON CURVE

Dr. Rajeshwari U R, Ms. Gargi Lakshmi Sridharan

Abstract :

This paper illustrates the impact of Life Expectancy on Economic Growth rates between the years 1965 to 2012 in India. This is a very significant topic of research because the economic ability and performance of nations could be enhanced by improving the health of its citizens. Previous studies have proven that the wealth of a country is highly dependent on the life expectancy of its inhabitants. The Preston Analysis forms the theoretical construct of the study. The relationship between Life Expectancy and Economic Growth is empirically tested in the paper, in addition to proving the validity of the Preston Curve in the Indian context. A quantitative study is undertaken using secondary statistics. After testing for stationarity, using the Augmented Dicky–Fuller test and PhillipsPerron Test the long–run relationship between Life Expectancy and Economic Growth has been analysed by using the Auto Regressive Distributed Lag model. It has been concluded that there is indeed a strong long–run relationship between Life Expectancy and Economic Growth and the empirical results have proven that a 1 per cent increase in Life Expectancy led to a 14 per cent increase in Economic Growth