Cosimo Magazzino, Monica Auteri, Nicolas Schneider, Ferdinando Ofria and Marco Mele
The objective of this study is to reevaluate the correlation among pharmaceutical consumption, per capita income, and life expectancy across different age groups (at birth, middle…
Abstract
Purpose
The objective of this study is to reevaluate the correlation among pharmaceutical consumption, per capita income, and life expectancy across different age groups (at birth, middle age, and advanced age) within the OECD countries between 1998 and 2018.
Design/methodology/approach
We employ a two-step methodology, utilizing two independent approaches. Firstly, we con-duct the Dumitrescu-Hurlin pairwise panel causality test, followed by Machine Learning (ML) experiments employing the Causal Direction from Dependency (D2C) Prediction algorithm and a DeepNet process, thought to deliver robust inferences with respect to the nature, sign, direction, and significance of the causal relationships revealed in the econometric procedure.
Findings
Our findings reveal a two-way positive bidirectional causal relationship between GDP and total pharmaceutical sales per capita. This contradicts the conventional notion that health expenditures decrease with economic development due to general health improvements. Furthermore, we observe that GDP per capita positively correlates with life expectancy at birth, 40, and 60, consistently generating positive and statistically significant predictive values. Nonetheless, the value generated by the input life expectancy at 60 on the target income per capita is negative (−61.89%), shedding light on the asymmetric and nonlinear nature of this nexus. Finally, pharmaceutical sales per capita improve life expectancy at birth, 40, and 60, with higher magnitudes compared to those generated by the income input.
Practical implications
These results offer valuable insights into the intricate dynamics between economic development, pharmaceutical consumption, and life expectancy, providing important implications for health policy formulation.
Originality/value
Very few studies shed light on the nature and the direction of the causal relationships that operate among these indicators. Exiting from the standard procedures of cross-country regressions and panel estimations, the present manuscript strives to promote the relevance of using causality tests and Machine Learning (ML) methods on this topic. Therefore, this paper seeks to contribute to the literature in three important ways. First, this is the first study analyzing the long-run interactions among pharmaceutical consumption, per capita income, and life expectancy for the Organization for Economic Co-operation and Development (OECD) area. Second, this research contrasts with previous ones as it employs a complete causality testing framework able to depict causality flows among multiple variables (Dumitrescu-Hurlin causality tests). Third, this study displays a last competitive edge as the panel data procedures are complemented with an advanced data testing method derived from AI. Indeed, using an ML experiment (i.e. Causal Direction from Dependency, D2C and algorithm) it is believed to deliver robust inferences regarding the nature and the direction of the causality. All in all, the present paper is believed to represent a fruitful methodological research orientation. Coupled with accurate data, this seeks to complement the literature with novel evidence and inclusive knowledge on this topic. Finally, to bring accurate results, data cover the most recent and available period for 22 OECD countries: from 1998 to 2018.
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Maria Daniela Giammanco, Lara Gitto and Ferdinando Ofria
Non-performing loans (NPLs) may determine an overall weakness of the banking system within a country. The purpose of the present study is to analyze the impact of government…
Abstract
Purpose
Non-performing loans (NPLs) may determine an overall weakness of the banking system within a country. The purpose of the present study is to analyze the impact of government failures on NPLs in Asian countries in the time span 2000–2020. The variables employed as proxies of government failures are public debt as % of gross domestic product (GDP) and a government ineffectiveness index proposed by the World Bank.
Design/methodology/approach
The econometric approach employed is a panel generalised time series (GLS) model with heteroskedasticity and autocorrelation specific to each panel.
Findings
The results confirm that public debt as % of GDP and governmental ineffectiveness impacted significantly on NPLs for Asian countries in the observed period.
Originality/value
The literature offers similar results only for some individual Asian countries, while a wider analysis is lacking for Asian macroareas. The present paper considers 31 Asian countries, and supports the idea that a healthy financial sector is correlated to institutional quality and political regime. Hence, policy makers are advised to monitor governance indicators to reduce NPLs.
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Damiano Fiorillo and Ferdinando Ofria
This paper examines the relationship between human and social capital and participation and frequency of visits to museums, archaeological sites and monuments, controlling for any…
Abstract
Purpose
This paper examines the relationship between human and social capital and participation and frequency of visits to museums, archaeological sites and monuments, controlling for any possible demographic and socioeconomic characteristics. It reviews the literature on the determinants of heritage participation to highlight the importance of educational attainment and the lack of work on social relations.
Design/methodology/approach
It uses the microdata of the “Multipurpose Survey on Households – Aspects of Daily Life”, available from the Italian Statistical Office for the years 2015–2020, to estimate ordered probit and zero-inflated ordered probit models.
Findings
The results show that Italians’ participation in cultural heritage activities and the frequency of such participation are primarily related to education level, followed by social interaction variables. However, when we interplay education level and social relations variables, the findings show that people with a high school qualification (diploma) who meet friends several times a week and are satisfied with relationships with friends display negative correlations with participation and frequency in cultural heritage activities. Other important determinants of the participation and frequency of cultural heritage activities are gender, student status, foreign citizenship and higher occupations.
Originality/value
To our knowledge, this is the first paper that studies the role of human and social capital in heritage cultural participation in Italy as well as the first study in literature on cultural participation that analyses the interplay between human capital and social relations.
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Ferdinando Ofria and Massimo Mucciardi
The purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European…
Abstract
Purpose
The purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European countries; comparing two periods: one prior to the crisis of 2007 and another one after that. The authors first modeled the NPLs with an ordinary lest square (OLS) regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the authors utilized the geographically weighted regression (GWR) to explore regional variations in the relationship between NPLs and the proxies of “Government failures”.
Design/methodology/approach
The authors first modeled the NPL with an OLS regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the author utilized the Geographically Weighted Regression (GWR) (Fotheringham et al., 2002) to explore regional variations in the relationship between NPLs and proxies of “Government failures” (corruption and public debt as % of GDP).
Findings
The results confirm that corruption and public debt as % of GDP, after the crisis of 2007, have affected significantly on NPLs of the EU countries and the following countries neighboring the EU: Switzerland, Iceland, Norway, Montenegro, and Turkey.
Originality/value
In a spatial prospective, unprecedented in the literature, this research focused on the impact of corruption and public debt as % of GDP on NPLs in European countries. The positive correlation, as expected, between public debt and NPLs highlights that fiscal problems in Eurozone countries have led to an important rise of problem loans. The impact of institutional corruption on NPLs reports that the higher the corruption, the higher is the level of NPLs.
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Emanuele Millemaci and Ferdinando Ofria
The aim of this study is to investigate the validity of the Kaldor-Verdoorn's law in explaining the long-run determinants of the labor productivity growth for the manufacturing…
Abstract
Purpose
The aim of this study is to investigate the validity of the Kaldor-Verdoorn's law in explaining the long-run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and the USA).
Design/methodology/approach
The authors consider the period 1973-2006 using data provided by the European Commission – Economics and Financial Affairs. The method is instrumental variable. The robustness of estimates is checked by means of the Chow and the CUSUM and CUSUMQ tests. The authors consider the traditional specification of the dynamic Verdoorn law and the one which also includes investment to output ratio (I/Y), as a proxy of the capital growth rate, and the average labor cost growth, as a proxy of supply factors.
Findings
The findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period.
Originality/value
The authors consider the most recent years, which has been characterized by a constant decline in the average GDP growth rates; a productivity growth decline; the long-term reduction in the manufacturing share of total employment. The authors examine the importance of alternative hypotheses such as those related to the existence of supply constraints. The authors check the stability of the KVL throughout the period under the consideration and across countries. The authors evaluate whether, in the case of the developed countries, economies of scale are significant.