Climate Change and Poverty in the MENA Region: Evidence from a Panel ARDL Model Using Household Consumption and Infant Mortality

Abstract

Climate change is becoming an increasingly important source of economic and health vulnerability in developing countries. This study examines the dynamic relationship between climate change and poverty across 22 countries in the Middle East and North Africa (MENA) region from 2000 to 2023. Poverty is captured through two indicators: household consumption expenditure, the monetary dimension, and infant mortality, the non-monetary dimension. Methodologically, the analysis relies on a panel autoregressive distributed lag (panel ARDL) model, estimated using the Pooled Mean Group (PMG) and Mean Group (MG) approaches. The results reveal a long-run relationship among climatic variables, macroeconomic factors, and poverty-related indicators. In the long run, precipitation is associated with a decline in household consumption expenditure, while temperature is associated with higher infant mortality, indicating a deterioration in both monetary and health-related well-being under changing climatic conditions. In the short run, rising temperatures are also associated with lower household consumption expenditure, revealing the immediate vulnerability of living standards to climate shocks. In addition, GDP per capita is associated with higher household consumption and lower infant mortality, while education is associated with lower health-related poverty. Inflation appears to exacerbate poverty, whereas the positive association between health expenditure and infant mortality suggests reverse causality or inefficiencies in the allocation of health resources. These findings highlight the need to articulate climate adaptation strategy, macroeconomic stability, education investment, and improved efficiency of health spending in order to achieve sustainable reduction in poverty in the MENA region.