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The Long Run Relationship between the Human Development Index with
Health and Education expenditure In Malaysia
Nur Fara Nabila Binti Jamaludin
Supervisor: Madam Roshanim Binti Koris
Bachelor of Economics (Natural Resources)
School of Social and Economic Development
The human development index is an index of composite indicators that measures the
average achievement of a country based on the three major dimensions of human
development: longer and healthier life, education attainment and lifestyle. The aim of
this study is to examine the direct relationship between government health and
education expenditure with the human development index in Malaysia. This study is
used annual time series data from 1990 to 2015 with three variables where is the
human development index as a dependent variable while government health and
education expenditure as independent variables. ARDL Model comprising of cointegration
test as well as other statistical tests such as Unit Root tests, Cusum test
and Cusum Squareare used to see the relationships between these variables. The
results of the study are expected to have a long-term relationship between health and
education expenditure with the human development index. This illustrates that
throughout 1990 to 2015, government health and education expenditure have
contributed to improve the human development index in Malaysia. Therefore, in order
to improve human development in this country, the government must increase
government expenditure on health and education.
Keyword: Human development index, health expenditure, education expenditure, long
run relationship, ARDL.
1443 | UMT UNDERGRADUATE RESEARCH DAY 2018