World health organization experts believe that life expectancy is linked to economic growth and, 10% increase in life expectancy at birth will increase the economic growth rate by 0.35% a year.
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Table of Contents
1. Abstract ................................................................................................................................................ 3
2. Introduction .......................................................................................................................................... 4
3. Methods ................................................................................................................................................ 5
4. Analysis ................................................................................................................................................. 5
4.1. Linear regression .......................................................................................................................... 5
4.1.1. Assumption of the linear regression .................................................................................... 5
4.2. Principal component analysis ...................................................................................................... 6
4.2.1. Assumption of principal component analysis ..................................................................... 6
4.3. Redundancy analysis .................................................................................................................... 7
5. Results................................................................................................................................................... 7
5.1. General linear model .................................................................................................................... 7
5.2. Principal component analysis ...................................................................................................... 8
5.2.1. PCA on all the variables ............................................................................................................ 8
5.2.2. PCA on 2 sets of variables ........................................................................................................ 9
5.3. Redundancy analysis .................................................................................................................. 10
6. Discussion ........................................................................................................................................... 10
7. Acknowledgments .............................................................................................................................. 10
8. References .......................................................................................................................................... 11
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1. Abstract
Health expenditures have a statistically significant effect on infant, neonatal and under‐
five mortality. For African countries, our results imply that total health expenditures (as well as
the government component) are certainly important contributor to health outcomes in terms
of child mortality rates. Per capita government expenditure on health seemed to be more
significant on models especially per capita government expenditure on health for the year
1995. Inter correlation of the two sets of variables, health expenditures and mortality rates, are
strong but not between the variables. Infant, neonatal and under‐five mortalities are negatively
correlated with the health expenditure in the Sub‐Saharan African countries studied. Health
care expenditure seems to be only one of the many factors important in improving the health
status of a member. The analysis presented in this paper finds evidence of a weak statistically
significant relationship between per capita health spending, and health outcomes. Each of the
health outcomes can be an indication of the other health outcome. Neonatal mortality rate
itself is an indication of how high or low the infant mortality is going to be in a specific year in a
country. This may be due to the infection caused death among the under five which accounts
for 73% of under 5 death in Africa. In countries with high infant mortality rate, the absence of a
strong statistical relationship may be due to model misspecification or may reflect the fact that
at high levels of population health, the returns for the increases in health spending are small.
For future studies, other variables should be included.
Abbreviations
PC95TEXH 1995 Per capita total expenditure on health (PPP int. $)
PC05TEXH 2005 Per capita total expenditure on health (PPP int. $)
PC95GEXH 1995 Per capita government expenditure on health (PPP int. $)
PC05GEXH 2005 Per capita government expenditure on health (PPP int. $)
UFD00 2000 Number of under‐five deaths (thousands)
UFD10 2010 Number of under‐five deaths (thousands)
ID00 2000 Number of infant deaths (thousands),
ID10 2010 Number of infant deaths (thousands)
ND00 2000 Number of neonatal deaths (thousands)
ND10 2010 Number of neonatal deaths (thousands)
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2. Introduction
Life expectancy is linked to economic growth and, 10% increase in life expectancy at
birth will increase the economic growth rate by 0.35% a year, according to WHO (world health
organization). There is evidence that empowering health will bring significant benefits for the
economy (1). Low health status is a heavy financial burden and according to Commission on
Macroeconomics and Health (2001) economic growth of wealthy and poor countries is about
50% different due to the life expectancy and health status. Economists consider child health
and mortality as important indicators of the success or failure of a government policy especially
when studying developing countries (2). Health definitely is linked with sustainable economic
growth and development. This could be due to the fact that healthy population is more
productive at work, spend more time in the workplace, stay in labor force longer, invest in their
own and children’s education leading to the increased productivity and generally earn higher
incomes which could potentially be the funds available for investment in the economy (3).
Two‐thirds of deaths occur in just 10 countries. Child mortality in West and Central
Africa is the highest. In these regions, more than 150 of every 1,000 children born die under age
five in compare to 6 of every 1,000 children born in a wealthy country (North America, Western
Europe and Japan) (UNICEF). Health care expenditure per person per year in high‐income
countries exceeded US$ 2,000 while in Africa it averaged between US$13‐$21 in 2001
(Commission for Africa, 2004). In sub‐ Saharan Africa the expenditure should rise to US$ 38 by
2015 just to deliver basic treatment and care for the major communicable diseases (HIV/AIDS,
TB and malaria), and early childhood and maternal illnesses (Commission for Macroeconomics
and Health, 2001). Total spending on health has shown minimal to no impact on child mortality
in some of earlier studies(4, 5). These studies have recorded empirical evidence that public
spending on health is not the main cause of child mortality outcomes (6). The variation could be
very well explained by other factors such as income, income inequality, female education,
mother literacy, degree of ethnolinguistic fractionalization and findings show that these all play
significant role in child mortality across countries (7‐9). These results mean that reduced
poverty, income inequality, and increased female education would reduce child mortality as
much than just increasing public spending on health. Despite public belief, study has shown
that government health expenditures account for less than one‐seventh of one percent
variation in under‐five mortality across countries and the conclusion was drawn that 95% of the
variation in under‐5 mortality can be enlightened by factors such as a country’s per capita
income, female educational level, resources at hospital, managed care and choice of region (10,
11). The same applies to low‐income countries where no significant relationship between
health expenditure spending and infant mortality was found (12). Enhanced sanitation as a
public health measure have proved to play a bigger role in improving child health in the past
150 years than even the most advanced personal medical care technologies (13, 14). Therefore,
child mortality may be not a good measure of social and economic conditions such as public
health, insurance coverage, or economic crises in all countries but certainly is considered good
indicator for African countries. In 2000, the United Nations (UN) set eight targets, known as
Millennium Development Goals, aiming to promote human development of which four are in
direct or indirect relation to child mortality rate. The key targets to be reached by 2015
throughout the world are in the areas of poverty reduction, health improvements, education
attainment, gender equality, environmental sustainability, and fostering global partnerships
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(figure 1). The fourth goal to reduce child mortality by two‐thirds requires action on the first
goal, halving extreme poverty and hunger, since malnutrition caused by chronic hunger causes
the death of more than 5 million children each year globally (15).
3. Methods
The dataset contains 12 continuous variables with the sample size of 45 (45 African
countries) which is large and good enough for the central limit theorem (CLT) [approximately
normally distributed]. It is hypothesized that child yearly death rate as an indicator of health
outcome, depend upon variance in government and total health expenditure (figure 4, 5, 6). In
this research, the economical consequences of health spending on child death rate will be
studied and results will be reported. The questions to be answered are as below;
1. Neonatal mortality rate 2010 is a response of government and total health expenditure of
1995 and 2005
2. Neonatal mortality rate 2010 is a response of government and total health expenditure
2005
3. Infant mortality rate 2010 is a response of government and total health expenditure of
1995 and 2005
4. Infant mortality rate 2010 is a response of government and total health expenditure 2005
5. Under 5‐mortality rate 2010 is a response of government and total health expenditure of
1995 and 2005
6. Under 5‐mortality rate 2010 is a response of government and total health expenditure
2005
7. Neonatal mortality rate 2000 is a response of government and total health expenditure
1995
8. Infant mortality rate 2000 is a response of government and total health expenditure 1995
9. Under 5‐mortality rate 2000 is a response of government and total health expenditure
1995
4. Analysis
4.1. Linear regression
Performing linear regression about child mortality (response) and explanatory variables
(government and total health expenditures) would tell us if there is any relationship between
the response and the explanatory variables thus there might be some collinearity or
multicollinearity among the independent variables (exact collinearity should be considered
because if there is any then the regression coefficient cannot be calculated). Correlations
whether positive, negative, and associations whether strong or weak can be determined in this
step.
4.1.1. Assumption of the linear regression
To check the normality of each variable, Shapiro‐Wilk normality test was performed
and the p‐values were analyzed on both original dataset and the log10 transformed dataset
(table 3). For the original data, the p‐values for all the variables are less than alpha so the null
hypothesis is rejected in the favor of alternative hypothesis. To make the data of normal
distribution log10 transformation was applied to the dataset. P‐values were improved but still
most of the variables are of non‐normal distribution. PC95TEXH, PC05GEXH, UFD10 have p‐
values above alpha so Ho is accepted and these variables are of normal distribution.
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Transforming improved the normality but not to satisfactory level thus since listwise deletion of
outliers has the risk of losing some influential observation then I decided to keep all the data in
the analysis. The hypothesis for Shapiro‐Wilk normality test is as follows;
Ho: data is normal
Ha: data is non‐normal
The null hypothesis for multiple linear regression is that all the slopes are equal to zero
and the alternative hypothesis is that at least one slope does not equal to zero.
Ho: β1=β2=β3=β4=βi=0
Ha: at least one βi is different
Best fit could be interpreted as “how good is the proposed model (regression
equation)”and if “it could predict the y values reasonably.” In other words how good is the
fitted model for describing the relationship between x and y and so for predicting value of y for
a given x within the acceptable x range. Goodness of fit could be measured by coefficient of
determination (R2
). General rule of thumb is that R2
greater than 60% would make a proposed
model safe enough for making predictions.
4.2. Principal component analysis
Textbooks state that “principal component analysis is performed on a matrix of Pearson
correlation coefficients therefore data should satisfy the assumptions for this statistic”.
To extract the important variables out of the 12 variables in the original dataset and
reduce the dimensionality principal component analysis is to be performed. Components are
orthogonal to each other (uncorrelated). PCA is more sensible when data are highly correlated
(correlation coefficients bigger than 0.3 and smaller than ‐0.3) and even though normality of
the dataset is not essential but would be preferred. If all the variables on the same scale, only
then the predictions and interpretation would be rational and this could be achieved by
standardizing the data and performing transformation.
4.2.1. Assumption of principal component analysis
Linearity is preferred and so the relationship between all observed variables should be
linear. Normal distribution of each observed variable is also desirable but not necessary. For the
latter reason variables that demonstrate skewness may be transformed to better approximate
the normality. One could also assume the normality of the dataset if the sample size is greater
than 25 because the Pearson correlation coefficient is robust against violations of the normality
assumption. According to Dr. Whitehead if dataset does not contain any zero values then it can
be analyzed by principal component analysis. In addition, normality is preferred not essential,
and independence is not required.
The dataset contains no missing values but some unusually large or small values are
present which maybe outliers contributing to the non‐normal distribution of the dataset. I kept
all the units in because these values maybe influential not outliers.
Variables are relatively correlated for example; per capita health expenditure,
government and total, are positively related meaning that increase in one would lead in
increasing the other (table 2).
Normality of the original dataset was tested but the data were non‐linear therefore, two
forms of transformation were performed, square root and log10. Square root transforming of
all the variables did not much help the linearity and normality whereas log10 transforming of
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all the variables induced the normality to some degree keeping its original characteristics
(Figure 9, 10).
4.3. Redundancy analysis
Redundancy analysis is done to show that there is a linear dependence of the child
mortality variables, Y on the health expenditure variables, X. In redundancy analysis linear
regression is applied to represent response variable (child mortality) as linear function of
explanatory variable (health expenditure) and then to use PCA in order to visualize the result.
Among those components of Y which can be linearly explained with X (multivariate linear
regression) one could take those components which represent most of the variance.
5. Results
5.1. General linear model
Several multiple linear models were tested with the null hypothesis that the slopes are
all equal to zero. All the tested models have p‐values smaller than alpha (0.5) leading to the
rejection of null hypothesis in favor of alternative hypothesis meaning that at least one β is
different from zero. There is significant relationship between the independent and the response
variable and so changes in x would affect the changes in y.
All the possible models were tested. The answers for biological questions are as follows;
Biological question 1: Neonatal mortality rate 2010 has association with the government and
total health expenditure of 1995 and 2005 at the significance level of 5%. Stepwise regression
shows that it is more dependent on the 1995 government health expenditure (table 4).
Biological question 2: Neonatal mortality rate 2010 has association with the government and
total health expenditure 2005 at the significance level of 5%. Stepwise regression shows that it
is more dependent on the 2005 government health expenditure (table 4).
Biological question 3: Infant mortality rate 2010 has association with the government and total
health expenditure of 1995 and 2005 at the significance level of 5%. Stepwise regression shows
that it is more dependent on the 1995 government health expenditure (table 4).
Biological question 4: Infant mortality rate 2010 has association with the government and total
health expenditure 2005 at the significance level of 5%. Stepwise regression shows that it is
more dependent on the 2005 government health expenditure (table 4).
Biological question 5: Under 5‐mortality rate 2010 has association with the government and
total health expenditure of 1995 and 2005 at the significance level of 5%. Stepwise regression
shows that it is more dependent on the 1995 government health expenditure (table 4).
Biological question 6: Under 5‐mortality rate 2010 has association with the government and
total health expenditure 2005 at the significance level of 5%. Stepwise regression shows that it
is more dependent on the 2005 government health expenditure (table 4).
Biological question 7: Neonatal mortality rate 2000 has association with the government and
total health expenditure 1995 at the significance level of 5%. Stepwise regression shows that it
is more dependent on the 1995 government health expenditure (table 4).
Biological question 8: Infant mortality rate 2000 has association with the government and total
health expenditure 1995 at the significance level of 5%. Stepwise regression shows that it is
more dependent on the 1995 government health expenditure (table 4).
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1st
pc (Correlation Matrix) = ‐0.27 (PC95TEXH) ‐0.27 (PC05TEXH) ‐0.26 (PC12TEXH) ‐0.29
(PC95GEXH) ‐0.27 (PC05GEXH) ‐0.27 (PC12GEXH) +0.3 (UFD00) +0.3 (UFD10) +0.3 (ID00) +0.29
(ID10) +0.3 (ND00) +0.28 (ND10)
Scree plot can be performed to decide which components to keep for the Varimax
rotation analysis. Looking at the plots for PCA on correlation would reveal that only two
components are important, as drop is obvious after these two components. For further
analysis, only first two components were maintained. This would plot the eigenvalue associated
with a principal component versus the number of the component to expose the relative
magnitude of eigenvalues (Figure 20).
Looking at the biplot, one can say that death rates whether infant, neonatal or under 5
are highly correlated for 2000 and 2010. Moreover per capita government and total health
expenditure are also highly correlated (Figure 21). Both health expenditure and mortality rates
load high on the first component and so most of the variance on the 1st
component in explained
by the two set of variables but in different direction. Their importance on the component are
more or less the same because the size of arrows are almost equal.
Examining the scores plot of correlation matrix analysis, prediction can be made that
countries relatively spending big on the health and have very low mortality rates have negative
scores (Algeria) on the 1st
and 2nd
component and countries with very low spending and high
mortality have positive scores on the 1st
component (Nigeria). Seychelles that spend high and
have almost to none mortality rate have high negative scores on the 1st
and relatively high
negative score on the 2nd
component (Figure 22).
Varimax plot makes the interpretation easy as it reveals the relationship of each original
variable to the factor. This rotation maximizes the high correlations while minimizing the low
correlations. Varimax plot for correlation matrix shows that the countries with relatively big
health expenditure have negative scores on both the components and in converse countries
with low to minimal health expenditure have positive scores on both the components (Figure
23).
5.2.2. PCA on 2 sets of variables
Principal component analysis was done on the independent and dependent variable as
two set. Since the measurements are on the same scale, therefore analysis were done with the
covariance matrix.
PCA of the child mortality rates revealed all the principal components with Eigen values
more than or equal to 1. These two principal components cumulatively account for 99.9% of
the variance in the dataset. Below is the formula for the 1st
principal component:
1st pc for child mortality rates (covariance matrix) = ‐0.63(UFD00) ‐0.54(UFD10) ‐
0.39(ID00) ‐0.30(ID10) ‐0.17(ND00) ‐0.170(ND10)
PCA of the health expenditure revealed all the principal components with Eigen values
more than or equal to 1. These two principal components cumulatively account for 97.1% of
the variance in the dataset. Scree plots for both set of PCA confirms the importance of the first
2 components (figure 26‐27). Below is the formula for the 1st
principal component:
1st pc for health expenditures (covariance matrix) = ‐0.45(PC95TEXH) ‐0.69(PC05TEXH) ‐
0.305(PC95GEXH) ‐0.467(PC05GEXH)
Looking at the biplot for the PCA of mortality rates, one can say that death rates of 2000
are highly correlated so are the 2010 death rates. Based on the size of arrows, importance of
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the under five death rate is more significant the neonatal and the infant. Biplot of health
expenditures shows that health expenditures of 1995 are correlated and so are the 2005
expenditure thus importance of total expenditure of 2005 is more significant than the others
(1995 government expenditure has the least importance) (figure 28‐29).
Looking at score plot of PCA of the mortality rates, all the variables load negatively on
the pc1, some high and some low (figure 32). Score plot of PCA of the expenditures shows that
all the variables have loaded negatively and relatively high on pc1 (figure 33).
Varimax plot for PCA of mortality rates shows that the countries with high mortality
rates load highly negative on both the components such as Nigeria (figure 30).
Varimax plot for PCA of expenditures shows that the countries with both high
government and high total health expenditures load negatively high on the first and positively
high on the 2nd
component such as Seychelles. In converse, countries with high total and
relatively lower government health expenditures load highly negative on the first and positively
but relatively lower on the 2nd
component such as south Africa (figure 31).
5.3. Redundancy analysis
For the variable UFD00, a one unit increase in under 5 death leads to a 1.33 decrease (‐
1.33) in the first canonical variate of set 2 when all of the other variables are held constant.
Table 7 presents the standardized canonical coefficients for the first two dimensions
across both sets of variables. For the expenditure variables, the first canonical dimension is
most strongly influenced by PC05TEXH (0.25) and for the second dimension (1.00).
For the mortality variables, the first dimension was most strongly influenced by UFD00 ‐
1.33 and ID00 1.41 and the second dimension the ND00 ‐1.64 was the dominant variable (figure
24‐25).
6. Discussion
The overall picture is that health expenditure has impact on the child mortality rate and
the results are relatively statistically significant. This may be because HIV prevalence has been
high in the sub‐Saharan Africa in the two past decades (figure 3). This is in accordance to UN
report 2000 saying that “trend in HIV infection will have a profound impact on future rates of
infant, child and maternal mortality, life expectancy and economic growth.”
Although all the multiple linear regression models tested were accepted in the favor of
the alternative hypothesis that there is relationship between mortality rates and health
expenditure however the factors of the models usually were not statistically significant except
the health mortality rates e.g. dependence of infant mortality rate on neonatal and under 5
mortality rates with low p‐values and high t values (table 5). Negative loadings of the health
expenditure leads to positive relatively high loading of the health outcome, represented as child
mortality. One could say that health expenditure has some impact even though low on the
mortality rates but other variables have to be included in the analysis to decide its significance.
Variables that can be included in the study could be the female education, income, access to
vaccines, HIV prevalence, number of trained health professionals, hunger, sanitation, etc.
The results of this analysis are confirmatory to the other similar studies that have found
little to no impact of the health expenditure on the health outcomes.
7. Acknowledgments
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I would like to acknowledge the use of data from WHO organization. Data were selected
individually and then they were combined in one dataset.
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Assignment 2d, Soheila Abachi