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Health Care Expenditure And Gdp: An African Perspective

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  • JAUNKY, V.C

    ()

  • KHADAROO, A.J.

    ()

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    Abstract

    This paper sheds light on the income elasticity of health care expenditure in Africa. The existing literature has to date focused on developed countries due to scarcity of health expenditure data in developing countries. We herein exploit panel data techniques, combining time-series and cross-section data, which enable a substantial increase in testing power. Income elasticity of health care expenditure for 28 African countries over the decade 1991 – 2000 is investigated. In addition to aggregate health expenditure, we model public and private health expenditures separately. In both the short-run and long-run, public health expenditure is found to be a luxury while private health expenditure a necessity. This is not too surprising in the context of Africa, where the public sector has to strive hard to provide basic health care to the poor majority but where a rich minority can easily afford hi-tech private health care. Furthermore the income elasticity of public health expenditure is found to be pro-cyclical while that of private health expenditure is counter-cyclical, thereby reinforcing our previous finding.

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    Bibliographic Info

    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 8 (2008)
    Issue (Month): 1 ()
    Pages: 131-146

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    Handle: RePEc:eaa:aeinde:v:8:y:2008:i:1_11

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    Related research

    Keywords: Health care expenditure; panel cointegration; Africa;

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    References

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    1. Paul Romer, 1991. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
    2. Sergio Rebelo, 1999. "Long Run Policy Analysis and Long Run Growth," Levine's Working Paper Archive 2114, David K. Levine.
    3. Ben S. Bernanke & Refet S. Gürkaynak, 2002. "Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 11-72 National Bureau of Economic Research, Inc.
    4. Brock,W.A. & Taylor,M.S., 2004. "The Green Solow model," Working papers 16, Wisconsin Madison - Social Systems.
    5. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    6. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
    7. Karras, Georgios, 2003. "Trade Openness And Economic Growth Can We Estimate The Precise Effect?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 3(1).
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    Cited by:
    1. Seher Sülkü & Asena Caner, 2011. "Health care expenditures and gross domestic product: the Turkish case," The European Journal of Health Economics, Springer, vol. 12(1), pages 29-38, February.

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