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The Impact of Public Health Expenditure on Health Outcomes in South Africa

Author

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  • Besuthu Hlafa

    (Department of Economics, University of Fort Hare, Alice 5700, South Africa)

  • Kin Sibanda

    (Department of Economics, University of Fort Hare, Alice 5700, South Africa)

  • Dumisani MacDonald Hompashe

    (Department of Economics, University of Fort Hare, Alice 5700, South Africa)

Abstract

Health holds an important position in maintaining economic development since it is both a prerequisite for and an outcome of economic development. This means that health contributes greatly to the attainment of sustainable development and health outcomes. The importance of health is demonstrated in the Millennium Development Goals (MDGs) where three of the eight goals are aimed at improving health outcomes. Despite progress made by other middle-income countries in achieving health-related MDGs, South Africa is still worse off in respect of health outcomes and experiences a challenge in attaining positive outcomes for these goals. This study’s main focus was to identify the association between public health expenditure and health outcomes in South Africa’s nine provinces from 2002 to 2016. The study implemented fixed effects and a random effects panel data estimation technique to control for time effects and individual provincial heterogeneity. This was followed by employing the Hausman specification test to identify the fixed effects model as the appropriate estimator for the study. The study also employed the seemingly unrelated regression (SUR) model and the least squares dummy variable (LSDV) model to examine the impact of public health expenditure on each province separately. The findings elucidated that the relationship between public health expenditure and health outcomes in South Africa varied across provinces depending on provincial management and infrastructure availability.

Suggested Citation

  • Besuthu Hlafa & Kin Sibanda & Dumisani MacDonald Hompashe, 2019. "The Impact of Public Health Expenditure on Health Outcomes in South Africa," IJERPH, MDPI, vol. 16(16), pages 1-13, August.
    • Handle: RePEc:gam:jijerp:v:16:y:2019:i:16:p:2993-:d:259144
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    References listed on IDEAS

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    1. Jochen Hartwig & Jan-Egbert Sturm, 2018. "Testing the Grossman model of medical spending determinants with macroeconomic panel data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(8), pages 1067-1086, November.
    2. Smith, Peter C. & Stepan, Adolf & Valdmanis, Vivian & Verheyen, Piet, 1997. "Principal-agent problems in health care systems: an international perspective," Health Policy, Elsevier, vol. 41(1), pages 37-60, July.
    3. John Anyanwu & Andrew E. O. Erhijakpor, 2007. "Working Paper 91 - Health Expenditures and Health Outcomes in Africa," Working Paper Series 226, African Development Bank.
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    Cited by:

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    2. Jan Polcyn & Liton Chandra Voumik & Mohammad Ridwan & Samrat Ray & Viktoriia Vovk, 2023. "Evaluating the Influences of Health Expenditure, Energy Consumption, and Environmental Pollution on Life Expectancy in Asia," IJERPH, MDPI, vol. 20(5), pages 1-18, February.

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