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Cross-country disparities in health-care expenditure: a factor decomposition

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  • Jorge Alcalde-Unzu

    (Department of Applied Economics IV, Universidad del Pa�s Vasco, Spain)

  • Roberto Ezcurra

    (Department of Economics, Universidad P�blica de Navarra, Spain)

  • Pedro Pascual

    (Department of Economics, Universidad P�blica de Navarra, Spain)

Abstract

This note investigates the sources of international differences in the levels of per capita health-care expenditure, using data on the OECD countries between 1975 and 2003. To that end, we use Theil's second measure of inequality for decomposing cross-country disparities in per capita health-care expenditure into the contributions of various factors: health-care expenditure expressed as a share of GDP, labour productivity, employment rate, activity rate and the ratio of working-age population to total population. Our results show that cross-country differences in the share of GDP devoted to health-care expenditure and labour productivity are the main determinants of the level of dispersion in per capita health-care expenditure. On the contrary, existing disparities in the remaining explanatory factors considered play a less relevant role in this context. In any event, the analysis performed reveals that the overall inequality in per capita health-care expenditure decreased throughout the study period. This was due to the process of international convergence observed in most of the factors used to break down the level of per capita health-care expenditure. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1374
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 18 (2009)
Issue (Month): 4 ()
Pages: 479-485

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Handle: RePEc:wly:hlthec:v:18:y:2009:i:4:p:479-485

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Carrion-i-Silvestre, Josep Lluis, 2005. "Health care expenditure and GDP: Are they broken stationary?," Journal of Health Economics, Elsevier, vol. 24(5), pages 839-854, September.
  2. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  3. George Karatzas, 2000. "On the determination of the US aggregate health care expenditure," Applied Economics, Taylor & Francis Journals, vol. 32(9), pages 1085-1099.
  4. Theo Hitiris, 1997. "Health care expenditure and integration in the countries of the European Union," Applied Economics, Taylor & Francis Journals, vol. 29(1), pages 1-6.
  5. Pedro Pita Barros, 1998. "The black box of health care expenditure growth determinants," Health Economics, John Wiley & Sons, Ltd., vol. 7(6), pages 533-544.
  6. Di Matteo, Livio, 2005. "The macro determinants of health expenditure in the United States and Canada: assessing the impact of income, age distribution and time," Health Policy, Elsevier, vol. 71(1), pages 23-42, January.
  7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
  8. Joan Costa Font & Jordi Pons Novell, 2005. "Public Health Expenditure and Spatial Interactions in a Decentralized National Health System," Working Papers in Economics 139, Universitat de Barcelona. Espai de Recerca en Economia.
  9. Cheng, Yuk-shing & Li, Sung-ko, 2006. "Income inequality and efficiency: A decomposition approach and applications to China," Economics Letters, Elsevier, vol. 91(1), pages 8-14, April.
  10. Hansen, Paul & King, Alan, 1996. "The determinants of health care expenditure: A cointegration approach," Journal of Health Economics, Elsevier, vol. 15(1), pages 127-137, February.
  11. Theo Hitiris & John Nixon, 2001. "Convergence of health care expenditure in the EU countries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(4), pages 223-228.
  12. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
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Cited by:
  1. Roberto Ezcurra & Belén Iráizoz, 2009. "Spatial inequality in the European Union: does regional efficiency matter?," Economics Bulletin, AccessEcon, vol. 29(4), pages 2648-2655.
  2. Andrea M. Leiter & Engelbert Theurl, 2009. "The Convergence of Health Care Financing Structures: Empirical Evidence from OECD-Countries," Working Papers 2009-20, Faculty of Economics and Statistics, University of Innsbruck.
  3. Fallahi, Firouz, 2011. "Convergence of Total Health Expenditure as a Share of GDP: Evidence from Selected OECD Countries," MPRA Paper 51324, University Library of Munich, Germany.

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