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Convergence of Health Expenditure in OECD Countries: Evidence from a Nonlinear Asymmetric Heterogeneous Panel Unit Root Test

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  • Didem Pekkurnaz

    (University of North Carolina at Chapel Hill (UNC-CH), Department of Economics, USA)

Abstract

This paper examines the convergence in health expenditure across 22 OECD countries between 1980 and 2012 by implementing panel unit root tests. Contribution of application of the nonlinear asymmetric heterogeneous panel unit root test is twofold. Firstly, it relaxes the assumption of cross-sectional dependency in panel data. Secondly, it incorporates the asymmetric nonlinear mean reversion in a panel setting. Results show that while the conventional panel unit root test cannot reject the null hypothesis of a unit root in relative per capita health expenditures for the whole set of countries, both the symmetric and the asymmetric nonlinear panel unit root tests indicate the stationarity of the panel. Specifically, almost 23 percent of the countries are found to be converging by employing the nonlinear asymmetric panel unit root test. In addition, introducing asymmetric structure helps to uncover additional converging countries which cannot be detected using linear and nonlinear symmetric panel unit root tests.

Suggested Citation

  • Didem Pekkurnaz, 2015. "Convergence of Health Expenditure in OECD Countries: Evidence from a Nonlinear Asymmetric Heterogeneous Panel Unit Root Test," Journal of Reviews on Global Economics, Lifescience Global, vol. 4, pages 76-86.
    • Handle: RePEc:lif:jrgelg:v:4:y:2015:p:76-86
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    Citations

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    Cited by:

    1. Claudiu Tiberiu Albulescu, 2022. "Health Care Expenditure in the European Union Countries: New Insights about the Convergence Process," IJERPH, MDPI, vol. 19(4), pages 1-16, February.
    2. Tomasz Rokicki & Aleksandra Perkowska & Marcin Ratajczak, 2020. "Differentiation in Healthcare Financing in EU Countries," Sustainability, MDPI, vol. 13(1), pages 1-17, December.
    3. Nicholas Apergis & Tsangyao Chang & Christina Christou & Rangan Gupta, 2017. "Convergence of Health Care Expenditures Across the US States: A Reconsideration," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 303-316, August.
    4. Son Hong Nghiem & Luke Brian Connelly, 2017. "Convergence and determinants of health expenditures in OECD countries," Health Economics Review, Springer, vol. 7(1), pages 1-11, December.
    5. Clemente, Jesús & Lázaro-Alquézar, Angelina & Montañés, Antonio, 2019. "US state health expenditure convergence: A revisited analysis," Economic Modelling, Elsevier, vol. 83(C), pages 210-220.
    6. Gülsüm AKARSU & Reyhan CAFRI & Hanife BIDIRDI, 2019. "Are Public-Private Components of Health Care Expenditures Converging Among OECD Countries? Evidence from a Nonlinear Panel Unit Root TestAbstract: Many countries devote an increasing proportion of the," Sosyoekonomi Journal, Sosyoekonomi Society.

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