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Re-visiting the Health Care Luxury Good Hypothesis: Aggregation, Precision, and Publication Biases?

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  • Joan Costa-Font
  • Marin Gemmill
  • Gloria Rubert

    (Universitat de Barcelona)

Abstract

While a growing literature examining the relationship between income and health expenditures suggests that health care is a luxury good, this conclusion is contentiously debated due to heterogeneity of the existing results. This paper tests the luxury good hypothesis using meta-regression analysis, taking into consideration publication selection, precision, and aggregation bias. The findings suggest that publication bias exists, a result that is robust irrespectively of the tests employed. Precision and aggregation bias also appear to play a role in the generation of estimates. The corrected income elasticity estimates range from 0.26 to 0.84, although we cannot reject the luxury good hypothesis for some of the performed corrections.

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Bibliographic Info

Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 197.

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Length: 29 pages
Date of creation: 2008
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Handle: RePEc:bar:bedcje:2008197

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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques. Tinent Coronel Valenzuela, Num 1-11 08034 Barcelona. Spain.
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Cited by:
  1. Stanley, T. D. & Jarrell, Stephen B. & Doucouliagos, Hristos, 2010. "Could It Be Better to Discard 90% of the Data? A Statistical Paradox," The American Statistician, American Statistical Association, American Statistical Association, vol. 64(1), pages 70-77.
  2. David Prieto & Santiago Lago-Peñas, 2012. "Decomposing the determinants of health care expenditure: the case of Spain," The European Journal of Health Economics, Springer, Springer, vol. 13(1), pages 19-27, February.
  3. Benjamin Ho & Sita N. Slavov, 2012. "An alternative perspective on health inequality," Economics Bulletin, AccessEcon, vol. 32(4), pages 3182-3196.

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