Drought Exposure and Health Expenditure Patterns Among Farming Households in Northwestern Bangladesh

Farming households in Bangladesh are increasingly exposed to intensifying drought, with social, economic, environmental, and health consequences. Healthcare is also among the most expensive services in Bangladesh, which leaves farmers more susceptible to drought-related diseases. This study aimed to examine the current drought scenario and the association between drought conditions and farming households’ health expenditures and healthcare in the northwestern region of Bangladesh using both primary data from the 2022–2023 production year (collected in October 2023) and secondary rainfall and temperature data from 1972 to 2022. The analysis unfolds in two segments. The Standardized Precipitation Evapotranspiration Index (SPEI) was employed to examine the current drought scenario, interpolated from two weather stations onto a 0.05° (~ 5 km) grid and created upazila-level summarization. Household outcomes were then estimated using a censored least absolute deviation (CLAD) model, which addresses data censoring and non-normality behavior, and a multinomial logistic regression model (MNL) in which drought exposure is measured by households’ self-reported severity rather than SPEI value was used to examine the association between self-reported drought severity and households’ health expenditure and choice of health services. The results reveal that household education, spouse’s age, off-farm activities, credit access, use of savings, and drought severity were significantly associated with household health expenditures. Due to high out-of-pocket health expenses, health expenditure is inelastic to income, with an elasticity of 0.019 for off-farm income, stating that health expenditure rises less proportionately with household earnings. Households reporting moderate drought impact spend about 4.6% more per capita on healthcare than those reporting severe impact, and 3.22% more than those reporting weak drought. Household education, the dependency ratio, both farm and off-farm income, and drought severity were determined the choice of healthcare services. The findings of the study, while based on northwestern Bangladesh, are pertinent to other drought-affected agricultural areas in low- and middle-income nations, where climate stress, income volatility, substantial out-of-pocket health costs, and restricted access to formal healthcare similarly influence household welfare. The findings of this study suggest that health policies such as health insurance for farmers can play a necessary role in coping with drought-related diseases and high out-of-pocket expenses.