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What drives Health Care Expenditure in France since 1950?

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Author Info

  • Thomas Barnay

    (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée)

  • Olivier Damette

    ()
    (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée)

Abstract

Using the French annual database (1950-2009), we conducted a time-series analysis to explain the role of GDP per capita on HCE (Health Care Expenditure) per capita taking into account structural breaks and non-linearity in the long-term economic relationship between HCE and GDP, controlling for price effect, population ageing, innovation proxy and medical density. We show that the non-linearity of the long-run relationship between HCE and GDP comes from both the presence of a structural break and non-linearity explained by a transition variable (by constructing a smooth transition cointegrating regression). More precisely, lower GDP elasticity is explained by an exogenous shock linked to health system policies in the mid 1980's (break analysis) and endogenously driven changes in the health care system via medical density in France.

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Bibliographic Info

Paper provided by HAL in its series Working Papers with number hal-00717435.

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Date of creation: 01 May 2012
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Handle: RePEc:hal:wpaper:hal-00717435

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00717435
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Keywords: health expenditure; time series; GDP;

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References

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  1. Elisa Tosetti & Francesco Moscone, 2007. "Health Expenditure and Income in the United States," Discussion Papers in Economics 07/14, Department of Economics, University of Leicester.
  2. Bent Nielsen, 2000. "Cointegration Analysis in the Presence of Structural Breaks in the Deterministic Trend," Econometric Society World Congress 2000 Contributed Papers 1494, Econometric Society.
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  8. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
  9. Hartwig, Jochen, 2008. "What drives health care expenditure?--Baumol's model of 'unbalanced growth' revisited," Journal of Health Economics, Elsevier, vol. 27(3), pages 603-623, May.
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  11. Donald Freeman, 2003. "Is health care a necessity or a luxury? Pooled estimates of income elasticity from US state-level data," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 495-502.
  12. Okunade, Albert A. & Murthy, Vasudeva N. R., 2002. "Technology as a 'major driver' of health care costs: a cointegration analysis of the Newhouse conjecture," Journal of Health Economics, Elsevier, vol. 21(1), pages 147-159, January.
  13. Narayan, Paresh Kumar, 2006. "Examining structural breaks and growth rates in international health expenditures," Journal of Health Economics, Elsevier, vol. 25(5), pages 877-890, September.
  14. Saikkonen, Pentti & Choi, In, 2004. "Cointegrating Smooth Transition Regressions," Econometric Theory, Cambridge University Press, vol. 20(02), pages 301-340, April.
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Cited by:
  1. Nyamwange, Mathew, 2012. "Economic Growth and Public Healthcare Expenditure in Kenya (1982 - 2012)," MPRA Paper 43707, University Library of Munich, Germany.

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