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Government Health Expenditures and Health Outcomes

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Author Info
Farasat A.S. Bokhari () (Department of Economics, Florida State University)
Yunwei Gai () (Department of Economics, Florida State University)
Pablo Gottret () (Health Systems Development Cluster, World Bank)

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Abstract

This paper provides econometric evidence linking a country's per capita government health expenditures and per capita income to two health outcomes: under-five mortality and maternal mortality. Using instrumental variables techniques (GMM-H2SL), we estimate the elasticity of these outcomes with respect to government health expenditures and income while treating both variables as endogenous. Consequently, our elasticity estimates are larger in magnitude than those reported in literature, which may be biased up. The elasticity of under-five mortality with respect to government expenditures ranges from -.25 to -.42 with a mean value of -.33. For maternal mortality the elasticity ranges from -.42 to -.52 with a mean value of -.50. For developing countries, our results imply that while economic growth is certainly an important contributor to health outcomes, government spending on health is just as important a factor.

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File URL: http://dx.doi.org/10.1002/hec.1157
File Format: application/pdf
File Function: First version, 2005-02
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Publisher Info
Paper provided by Department of Economics, Florida State University in its series Working Papers with number wp2005_02_01.

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Length: 23
Date of creation: Feb 2005
Date of revision: May 2006
Handle: RePEc:fsu:wpaper:wp2005_02_01

Note: Forthcoming in Health Economics.
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Related research
Keywords: Under-five mortality; maternal-mortality; millennium development goals; government expenditures; elasticity;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Musgrove, P., 1996. "Public and Private Roles in Health," World Bank - Discussion Papers 339, World Bank.
  2. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
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  3. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  4. Anand, Sudhir & Ravallion, Martin, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-50, Winter. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Herrera, Santiago & Pang, Gaobo, 2005. "Efficiency of public spending in developing countries : an efficiency frontier approach," Policy Research Working Paper Series 3645, The World Bank. [Downloadable!]
  2. Wagstaff, Adam, 2008. "Fungibility and the Impact of Development Assistance: Evidence from Vietnam's Health Sector," Policy Research Working Paper Series 4800, The World Bank. [Downloadable!]
  3. Santiago Herrera & Gaobo Pang, 2006. "How Efficient is Public Spending in Education?," ENSAYOS SOBRE POLÍTICA ECONÓMICA, BANCO DE LA REPÚBLICA - ESPE. [Downloadable!]
  4. Brosio, Giorgio & Zanola, Roberto, 2008. "The welfare costs of national standards: a contribution to the debate on the outcomes of de/centralization," P.O.L.I.S. department's Working Papers 113, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
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