Government health expenditures, economic growth, biocapacity and life expectancy in the G-7 countries: evidence from panel data analysis (2000–2023)

In terms of human development, countries’ expenditure on health and education is becoming increasingly important with each passing day. The achievement of the sustainable development goal is closely influenced by the interdependence between the environment, energy and health sectors. In this context, many countries view healthcare as a fundamental human right, given its ability to extend and improve the quality of life of individuals, in their pursuit of sustainable development goals. This study examines the relationship between overall government health expenditure and indicators of life expectancy at birth, economic growth and biocapacity in the G7 countries (Canada, France, Germany, Italy, Japan, the UK and the US) for the period 2000–2023. The random coefficient model shows that the impact of independent variables on healthcare expenditure can vary from country to country. In France, Germany, Italy, the UK and Japan, the life expectancy variable is positive and significant. This result indicates that the increase in life expectancy has raised healthcare expenditure, particularly in these countries. Whilst economic growth was found to influence healthcare expenditure in all countries except the UK, this effect is positive in Japan but negative in the other countries. Improvements in biocapacity, however, have a negative impact on healthcare expenditure in all countries except Italy. The study distinguishes itself by selecting biocapacity-defined as nature’s ability to absorb pollution-thereby offering an assessment through a more comprehensive indicator that extends towards the level of environmental resilience