Modeling the Relationship between Life Expectancy, Population Growth, Carbon Dioxide Emission, and GDP Growth in Indonesia

Abstract

Research on Life Expectancy at Birth (LEB) and its relationship with several economic variables is interesting to be studied. LEB also describes the welfare condition of a country, where generally developed countries have a high level of LEB. This research will discuss the relationship between the variables of Life Expectancy at Birth (LEB), Corbon Dioxide (CO2) Emissions, Population Growth (PG), and Growth Gross Domestic Product (GDPG) in the case of Indonesia from 1950 to 2020. The aims of this study is to build a model of the relationship between variables LEB, CO2, PG and GDPG, and based on the best model obtained then will discuss the causal relationship between variables using Granger-Causality, Impulse Response Function (IRF), and forecasting and the proportion of error covariance decompositions. From the analysis results, the best model that describes the relationship between variables: LEB, CO2, PG, and GDPG is the Vector Error Correction Model (VECM). The results showed that there is a bidirectional relationship between the LEB variable and population growth. Partially, economic growth is proxied by GDPG affecting LEB and CO2 affecting PG. However, there was no effect of CO2 on LEB and GDPG in Indonesia. Based on the analysis results obtained, the chosen country is encouraged to consider the variables PG and GDPG in an effort to increase LEB in the future.