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Out-of-pocket expenditure and human welfare in Nigeria: Evidence from a fully modified ordinary least squares regression

Hongrui Jia(1), Xin Han(2), Timothy A. Aderemi(3), Nkiruka E. Ifekwem(4), Mamdouh Abdulaziz Saleh Al-Faryan(5),


(1) School of Business Administration, Northeastern University, Shenyang City, Liaoning Province 110000, China
(2) The institute of Silk Road Economics and Management, Xinjiang University of Finance &Economics, Xinjiang Province, China, Wulumuqi City
(3) Department of Public Administration and Economics, Mangosuthu University of Technology, Durban, South Africa
(4) Department of Business Administration, Bells University of Technology, Ota, Nigeria
(5) Board Member and Head of the Scientific Committee, The Saudi Economic Association, Riyadh, Saudi Arabia
Corresponding Author

Abstract


This study assesses the connection between out-of-pocket expenditure and human welfare in Nigeria using a Fully Modified Ordinary Least Squares regression. The assessment is based on data from the World Development Indicators (2023), from the periods of 2000 to 2023. The results attest that the status of human welfare in the areas of health, education and living standard is just slightly above the average global benchmark of 0.5. However, on an average basis, households in Nigeria pay 71% of their total health expenses directly from their pockets to health care providers. Also, OOP spending and human welfare had a significant negative relationship. Therefore, to improve the health component of human welfare in Nigeria, the policymakers should heavily subsidize the health care services. Both government health expenditure and GDP per capita had a direct but insufficient impact on human welfare in Nigeria. Therefore, for Nigeria to experience a significant improvement in human welfare via public health input and GDP per capita, the policymakers in the country should be allocating at least 15% of its total annual budget towards healthcare as recommended during the Abuja Declaration in 2001 with a view to lessening OOP spending of the households.

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