Global Journal of Health Science; Vol. 9, No. 5; 2017 ISSN 1916-9736 E-ISSN 1916-9744 Published by Canadian Center of Science and Education 105 Social Environment Determinants of Life Expectancy in Developing Countries: A Panel Data Analysis Fatin Aminah Hassan 1 , Nobuaki Minato 1 , Shuichi Ishida 1 & Norashidah Mohamed Nor 2,3 1 Graduate School of Technology Management, Ritsumeikan University, Ibaraki, Osaka, Japan 2 School of Public Health, University of Queensland, Brisbane, Australia 3 Faculty of Economics and Management, Universiti Putra Malaysia, Serdang, Selangor, Malaysia Correspondence: Fatin Aminah Hassan, Department of Technology Management, Ritsumeikan University, 2-150 Iwakura-cho, Ibaraki, Osaka, 567-8570, Japan. Tel: 81-70-4210-2880. E-mail: fatinamina89@gmail.com Received: July 2, 2016 Accepted: August 22, 2016 Online Published: September 28, 2016 doi:10.5539/gjhs.v9n5p105 URL: http://dx.doi.org/10.5539/gjhs.v9n5p105 Abstract Despite remarkable improvements in health over the past 50 years, there still remain a great number of health challenges around the world. This study examined the relationship between life expectancy rate (as a proxy for health status) with health expenditure, gross domestic product, education index, improved water coverage, and improved sanitation facilities in 108 selected developing countries using annual panel data within the period of 2006–2010. The empirical results from using the panel data approach showed a positive relationship between life expectancy rate and all of those explanatory variables. The relationship between life expectancy with education index and gross domestic product were significant at 1% and 5% significance levels, respectively. Furthermore, the causality finding showed that there is no short-run causality between life expectancy and its determinants. There is a unidirectional causality running from the independent variables of health expenditure, education index, improved water, and improved sanitation to life expectancy at birth. On the other hand, bidirectional causality exists between life expectancy and income in the long-run by employing VECM test. These independent variables can be considered as important determinants for investment in health status in the long-run. This study could be used as a guideline and may be significant for future researchers and policy makers who aim to improve the life expectancy in developing countries. Keywords: life expectancy rate, health, panel data, developing countries 1. Introduction Even though there have been incredible improvements in global health over the past 50 years, an increasing number of health care challenges still need to be addressed. Globally, more than one billion people are unable to access health care systems; there are 36 million deaths a year from non-communicable diseases and over 7.5 million children under the age of five died from malnutrition or infectious diseases, such as AIDS or HIV, tuberculosis, malaria, and so forth. People in developing countries with higher poverty levels that could threaten their health status are more likely to get sick or suffer chronic illness, injuries of greater severity, emotional and attitude problems, and many other physical and mental health problems. Health issues have become critical because they are now perceived as crucial inputs for economic growth, reducing poverty, and achieving long-term economic development (Asafu-Adjaye, 2007; Smith, 1999). Besides medical inputs such as the availability of general practitioners and the number of nurses, beds, and other medical inputs, the non-medical determinants of health such as income, health expenditure, education, personal health practice, and social and environmental issues are also crucial in maintaining good health and they might also directly affect the health of individuals. These non-medical factors are related to the way people are raised, their lifestyle, and how they overcome difficulties and unbearable circumstances that affect people of all ages including children, youths, and adults. People save money for future investment such as their health by taking medical insurance for its benefits. Thus, facilities such as hospital buildings and medical equipment alone cannot be assumed to be the determinants of health, whereas health care delivery system is also important to sustain health condition in some countries such as Canada (Clark et al., 1997). Life expectancy is widely used to gauge the health