TRƯỜNG ĐẠI HỌC NGOẠI THƯƠNG
  

ESSAY

ECONOMETRICS
The impact of air pollution indicators and GDP per capita on
human’s life expectancy in 2015
Class: KTEE218 (1-1718).1_LT
Lecturer: PhD. Vũ Thị Phương Mai
Group 10 members
Ngô Minh Ngọc

Student ID
1614450039

Đỗ Minh Ngọc

1614450038

Nguyễn Hồng Nhung

1614450041

Trần Lâm Oanh

1614450043

Hanoi , 2017

1

1.2.3

The effect of GDP per capita on life expectancy: ....................... 7

1.3 Air pollution ......................................................................................... 9

2

1.3.1

Defintion of pollution ................................................................... 9

1.3.2

Definition of air pollution ............................................................ 9

1.3.3

The situation of air pollution ....................................................... 9

1.3.4

The effect of air pollution on life expectancy ............................ 10

BUILD THE MODEL ............................................................................. 12
2.1 Methodology of the study ................................................................. 12
2.2 Theoretical modeling ........................................................................ 12
2.2.1

Determine the model type .......................................................... 12


Validation of model ...................................................................17

3.3 Recommendations, Solutions ...........................................................18
CONCLUSION .............................................................................................. 20
REFERENCES............................................................................................... 21
GUIDELINES FOR USING MODEL......................................................... 21
APPENDIX – DATA TABLE (Source: World Bank 2015) ......................22

3


Abstract
Life expectancy is regarded as one of many noteworthy indicators in measuring a
nation’s well-being. Researches in the last decades have presented several factors that
make great impacts on human’s life duration. In the context of highly development in
globalization, industrialization, and the like, GDP per capita and air pollution have proven
to possess significant influence.
It is unavoidable that industrialization and modernization cause environmental
pollution. Air pollution, as a part of it, brings about negative effects on human’s health.
Recently, the air pollution index has witnessed a dramatic increase. As a result, the number
of people catching respiratory diseases rose and the expectation of life changed. Never
before has the need of profound insight about the relationship between air pollution and
life duration been more essential.
In addition, another reason for the change in life expectancy is the fluctuation of
GDP per capita. Although constant efforts of government in health care service are beyond
doubt, healthcare benefits have not yet reached every single individual. On the basis of
variation in personal income, different individuals possess different capabilities of
affording medical care. As a consequence, there exist gaps in people’s mortal ages, which
make impacts on average longevity as a whole. This means that GDP per capita plays a

in understanding and data collecting, the essay may hardly avoid mistakes. The editorial
group is always willing to receive feedback from readers so as to complete the essay to the
fullest.
Many thanks!

5


1

THEORETICAL FRAMEWORK
1.1 Life expectancy
1.1.1 Definition
Life expectancy is a statistical measure of the average time an organism is expected
to live, based on the year of their birth, their current age and other demographic factors
including sex.
1.1.2 Measure
The most commonly used measure of life expectancy is at birth (LEB), which can
be defined in two ways:
 Cohort LEB is the mean length of life of an actual birth cohort (all individuals born
a given year) and can be computed only for cohorts born many decades ago, so that
all their members have died.
 Period LEB is the mean length of life of a hypothetical cohort assumed to be
exposed, from birth through death, to the mortality rates observed at a given year.
1.1.3 Situation
 Life expectancy at birth reflects the overall mortality level of a population. It
summarizes the mortality pattern that prevails across all age groups in a given year
– children and adolescents, adults and the elderly. Global life expectancy at birth in
2015 was 71.4 years (73.8 years for females and 69.1 years for males), ranging
from 60.0 years in the WHO African Region to 76.8 years in the WHO European


Graph 2: Plot of life expectancy vs. GDP per capita in 2009

The data for this graph is available from the Index Mundi website. The data is from
2003.
The graph shows that life expectancy at birth, increases at a decreasing rate with
respect to GDP per capita (PPP).
The main reason for this non-linear relationship is because people consume both
needs and wants. People consume needs in order to survive. Once a person’s needs are
satisfied, they could then spend the rest of their money on non-necessities. If everyone’s
needs are satisfied, then any increase in GDP per capita would barely affect life
expectancy.
GDP per capita isn't the only thing that affects life expectancy. Government
intervention can also affect it. A nation could be rich, but if its government ignores the
plight of the poor, it could lower the life expectancy.
Another reason for the wide variation in the life expectancies for countries with low
GDP per capita would be due to the level of non-market economic activity. For example, if
there is a lot of subsistence farming, people could be working and have enough food to eat,
but wouldn’t be contributing much to the nation’s GDP because they wouldn’t be buying
the food they eat, or selling the food they grow i.e. no exchange of money.
The relationship between life expectancy and GDP per capita is strong enough to
be the basis of a regression model. Simple functions that increase at a decreasing rate
include multiplicative (hyperbolas) and logarithmic functions.

8


1.3 Air pollution
1.3.1 Defintion of pollution
Pollution is the introduction of contaminants into the natural environment that

snowmelt) where tracing the pollution back to a single source is difficult.
1.3.2 Definition of air pollution
Air pollution occurs when harmful substances including particulates and biological
molecules are introduced into Earth's atmosphere. It may cause diseases, allergies or death
of humans; it may also cause harm to other living organisms such as animals and food
crops, and may damage the natural or built environment. Human activity and natural
processes can both generate air pollution.
1.3.3 The situation of air pollution
Air pollution is a significant risk factor for a number of pollution-related diseases
and health conditions including respiratory infections, heart disease, stroke and lung
cancer. The health effects caused by air pollution may include difficulty in breathing,
wheezing, coughing, asthma and worsening of existing respiratory and cardiac conditions.
These effects can result in increased medication use, increased doctor or emergency room
visits, more hospital admissions and premature death. The human health effects of poor air

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quality are far reaching, but principally affect the body's respiratory system and the
cardiovascular system. The most common sources of air pollution include particulates,
ozone, nitrogen dioxide, and sulphur dioxide. Children aged less than five years that live in
developing countries are the most vulnerable population in terms of total deaths
attributable to indoor and outdoor air pollution.
The World Health Organization estimated in 2014 that every year air pollution
causes the premature death of some 7 million people worldwide. India has the highest
death rate due to air pollution. India also has more deaths from asthma than any other
nation according to the World Health Organization. In December 2013 air pollution was
estimated to kill 500,000 people in China each year. There is a positive correlation between
pneumonia-related deaths and air pollution from motor vehicle emissions.
Annual premature European deaths caused by air pollution are estimated at


(Source: />Above is one example of the effect of air pollution control on life expectancy. Data on air
pollution and life expectancy from 545 U.S. counties in 2000 and 2007 show that recent
declines in PM2.5 to relatively low levels continue to prolong life expectancy in the US.
These benefits are largest among the most urban and densely populated counties. These
associations were estimated controlling for socioeconomic and demographic variables as
well proxy variables for and direct measures of smoking prevalence.

11


2

BUILD THE MODEL
2.1 Methodology of the study
 First of all, our group sets the hypothesis for the research question, "The impact of
air pollution indicators and GDP per capita on human’s life expectancy in 2015."
Why should this stage require a full review of the scope, nature, substance,
environment and condition of the subject, and relationships in the process of
mobilization?
 Build econometric models: From theoretical basis to the mathematical model and
statistical models to find out the most suitable one.
 The team collected sample and estimated values based on data from 180
observations in 2015 from 180 countries. For quantitative results, the number of
outputs should be equal to the number of inputs, which is the data collected by the
statistical method. As a result, the team selected information and checked the
statistical significance of the regression coefficients and the suitability of the model
based on the observed observations comparing with the previous research and
similar studies, to find the best results to use for analysis.
 During the course of the project, the team used the knowledge of econometrics and

Life expectancy

year

GPC

GDP per capita

USD

AP

Air pollution PM2.5, mean
annual exposure

microgram per cubic meter

Based on the sample regression function, the slope indicated in the sample, when the independent
variables GPC and AP were simultaneously 0, the mean dependent

variable LE was

̂̂
β.
0

̂̂

term shows in the sample, where the independent



180
3

6 Dec 2017 21:18

1,260

storage

display

value

variable name

type

format

label

gpc

float

%8.0g

GPC



le

180

71.53333

gpc
ap

180
180

12571.48
28.34444

Std. Dev.

Min

Max

8.035814

51

84

17599.25
19.77875

(obs=180)
le
le

1.0000

gpc
ap

0.6124
-0.3224

gpc

ap

1.0000
-0.2312

1.0000

14


Conclusion:
The variable GPC correlates with LE relatively high. The GPC variable has a
negative correlation coefficient, indicating the opposite effect on the dependent variable.
The AP variable has a positive correlation coefficient, which shows the same effect on the
dependent variable.
The correlation coefficient between the LE and the GPC is 0.6124, showing that

ESTABLISHMENT AND STATISTICAL DIMENSION
3.1 Estimate model
To run the regression model, we execute the “regress” command as follows:
.

regress le gpc ap
Source

Model
Residual
Total
le

gpc
ap
_cons

SS

4733.59357
6825.20643
11558.8
Coef.

df

MS

Number of obs



9.57

0.000

.0002059

.0003129

-.0776155
70.47188

.0241202
.9515858

-3.22
74.06

0.002
0.000

-.1252156
68.59397

-.0300154
72.34979

From the above table, we have the sample regression equation:
LE = 70.47188 + 0.0002594 GPC – 0.0776155 AP
2

H1: βGPC> 0
p-value (βGPC) = 5.54 x 10-7
Thirdly, that actively encouraging internationally co-ordinated research and
development aimed at a better understanding of atmospheric processes and effects of air
pollution on man and the environment, and at improving technologies for fossil fuel
combustion and control of pollutant emissions is highly recommended.
Moreover, cutting edge technology should be applied into manufacturing and
processing wastes.
There are also many ways to increase GDP per capita.
 Enforce the law and make sure courts are independent of the government. Rule of
law provides an indicator of economic development. Investors like to put their
money in countries where the governments protect private property and resolve
legal disputes fairly. It makes it easier to do business if management does not have
to worry that a local government will take over the company, capriciously tax
earnings or arrest the company's employees. Countries put themselves at an
economic disadvantage if they project hostility to foreign investment.
 Allow other countries to invest in yours. Many American companies maintain
brand presence all over the world. But the U.S. also tops the list of nations that
others invest in, according to "The World Factbook" of the Central Intelligence
Agency. A comparison of leaders in allowing foreign investment shows that these
countries enjoy strong economies.
 Educate the population. The Organization for Economic Cooperation and
Development publishes rankings comparing economic and educational
performance. Most of the top economies, including Japan, Germany and Korea,
also score highest in education, especially for science and math.
 Get rid of corruption. Transparency International, an anti-corruption watchdog
group, produces an index of how corrupt countries are, based on perceptions
revealed in extensive polling. Costs associated with corruption, such as bribes and

18



spending should be encouraged. For instance, when interest rates are lowered by
the federal government, consumers use their credit to purchase more goods and
services. Any action that encourages spending -- be it discounts, tax breaks or other
incentives -- increases GDP and income per capita.
Exports: Part of the GDP for a country is calculated by adding the total exports for
the year. All products that a country produces for sale to other countries are
considered exports. For instance, Japan exports vehicles for consumers in the
United States to purchase. Every Japanese vehicle purchased by a United States
consumer adds to the GDP of the Japanese economy, which consequently increases
per capita income. Increasing the number of exports directly increases income per
capita.
Government Spending: A government can increase the GDP of its country by
spending more money inside of the country. Any money spent on infrastructure,
government programs or subsidies has the potential to increase GDP and per capita
income. For instance, when the government orders fighter planes for use in the
military, defense and aeronautical contractors receive money for their work,
increasing GDP. Every plane built by a contractor is a product added to national
economic output.

If there were more time, our group would like to research more about how to
increase GDP per capita and human’s life expectancy as well as reduce air pollution
considerably.

19


CONCLUSION
Within the scope of the essay, the team examined the effect of GDP per capita and
the level of air pollution on average life expectancy of people in countries. According to
the model, GDP per capita and the level of air pollution are statistically significant in the

counties from 2000 to 2007 in an international context. Population Health Metrics. 2011
Life expectancy at birth versus GDP per capita (PPP) />
Peng RD, Dominici F. Statistical methods for environmental epidemiology in R: a case study in air
pollution and health. Springer; 2008
Pope CA, III, Ezzati M, Dockery D. Fine-particulate air pollution and life expectancy in the
United States. New England Journal of Medicine. 2009
Pr. Ph.D Nguyen Quang Dong and vPr. Ph.D Nguyen Thi Minh, 2015, Econometrics textbook,
Publisher of National Economics University
Shrestha LB. Life expectancy in the United States. CRS Report for Congress. 2005
The Effect of Air Pollution Control on Life Expectancy in the United States: An Analysis of 545 US
counties for the period 2000 to 2007
/>
GUIDELINES FOR USING MODEL
 Des
 Sum
 Corr le gpc ap
 Regress le gpc ap

21


APPENDIX – DATA TABLE (Source: World Bank 2015)
No.
1
2
3
4
5
6
7


Countries
Afghanistan
Albania
Algeria
Angola
Antigua and Barbuda
Argentina
Armenia
Australia
Austria
Azerbaijan
Bahamas, The
Bahrain
Bangladesh
Barbados
Belarus
Belgium
Belize
Benin
Bhutan
Bolivia
Bosnia and Herzegovina
Botswana
Brazil
Brunei Darussalam
Bulgaria
Burkina Faso
Burundi
Cabo Verde

3,077.0
4,574.1
6,532.1
8,757.2
30,967.9
6,993.5
615.6
303.7
2,954.1
1,163.2
1,244.4
43,315.7
348.4
777.2
13,653.2
8,069.2
6,044.5
727.6

Air pollution
48
18
36
36
14
13
26
6
17
30

78
76
61
76
76
74
82
82
72
75
77
72
76
74
81
70
61
70
69
77
66
75
77
74
60
57
72
68
58
82

58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77

Congo, Dem. Rep.
Congo, Rep.
Costa Rica
Cote d'Ivoire
Croatia
Cuba
Cyprus
Czech Republic
Denmark

Iraq

474.9
1,712.1
11,406.4
1,420.6
11,579.7
7,602.3
23,075.1
11,556.9
53,014.6
1,862.2
6,468.5
3,547.7
4,127.1
10,347.3
17,074.9
645.5
4,921.9
42,405.4
36,526.8
7,389.0
474.7
3,764.6
3,764.6
41,176.9
1,361.1
18,007.8
9,212.2
35,439.5

8
7
12
40
61
20
14
23
13
15
7
35
23
33
17
26
38
23
8
74
15
43
52

59
64
80
53
77
80

68
69
76
70

23


78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99

Kyrgyz Republic
Lao PDR
Latvia
Lebanon
Lesotho
Liberia
Lithuania
Luxembourg
Macedonia, FYR
Madagascar
Malawi
Malaysia
Maldives
Mali
Malta
Mauritania
Mauritius
Mexico
Micronesia, Fed. Sts.
Moldova
Mongolia
Montenegro
Morocco
Mozambique
Myanmar
Namibia
Nepal
Netherlands
New Zealand


1,832.5
3,944.2
6,461.2
2,847.3
528.3
1,194.6
4,737.7
743.8
44,292.9
38,201.9

10
21
20
17
13
39
20
16
3
29
67
17
33
20
33
25
8
19
17

66
82
75
71
66
74
79
54
62
75
82
76
66
63
75
77
57
82
63
74
77
69
71
69
77
76
58
66
64
70

142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157

Nicaragua
Niger
Nigeria
Norway
Oman
Pakistan
Panama
Paraguay
Peru
Philippines
Poland
Portugal
Qatar

2,655.2
74,505.2
16,627.4
1,431.2
13,134.0
4,109.4
6,030.3
2,878.3
12,566.0
19,220.0
66,346.5
8,958.8
9,329.3
710.3
4,149.4
1,624.6
20,732.9
908.7
5,237.3
15,390.0
587.5
53,629.7
16,089.7
20,729.9
1,922.0
426.0
5,769.8
758.7
25,683.8
3,844.9

13
19
19
21
20
7
20
30
32
10
28
14
14
50
18
22
6
13
50

75
60
53
82
77
66
78
73
75
69


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