This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Health Care Expenditures in OECD Countries: A Panel Unit Root and Cointegration Analysis

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Dreger, Christian () (Institute for Economic Research Halle and IZA Bonn)
Reimers, Hans-Eggert (Wismar University of Technology, Business and Design)

Additional information is available for the following registered author(s):

Abstract

This paper investigates the link between health care expenditures and GDP for a sample of 21 OECD countries using recent developed panel cointegration techniques. In contrast to previous studies, the analysis accounts for the fact that health care expenditures are not only determined by income. The other driving force is medical progress, which is proxied by different variables, like life expectancy, infant mortality and the share of the elderly. In the extended models, a cointegration relationship can be established among the variables. The income elasticity is not different from unity, implying that health care expenditures are not a luxury good. This finding is robust for alternative measures of medical progress. The evidence is unchanged, if alternative estimators of the cointegration vector are used. Controlling for cross section dependency does not affect the principal results, as cointegration can be found even in a model among nonstationary common factors.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: ftp://repec.iza.org/RePEc/Discussionpaper/dp1469.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1469.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 20 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1469

Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org

Order Information:
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Email:

For technical questions regarding this item, or to correct its listing, contact: (Mark Fallak).

Related research
Keywords: health care expenditures; medical progress; panel cointegration;

Other versions of this item:

Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
I10 - Health, Education, and Welfare - - Health - - - General

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. Chihwa Kao & Suzanne McCoskey, 1997. "A Residual-Based Test Of The Null Of Cointegration In Panel Data," Econometrics 9711002, EconWPA. [Downloadable!]
    Other versions:
  2. J. Breitung, . "A parametric approach to the estimation of cointegration vectors in panel data," Sonderforschungsbereich 373 2002-3, Humboldt Universitaet Berlin.
  3. MacKinnon, James G & Haug, Alfred A & Michelis, Leo, 1999. "Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(5), pages 563-77, Sept.-Oct. [Downloadable!]
    Other versions:
  4. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Chapters, in: NBER Macroeconomics Annual 1991, Volume 6, pages 141-220 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  5. Jörg Breitung, 2002. "A parametric approach to the estimation of cointegration vectors in panel data," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B5-4, International Conferences on Panel Data. [Downloadable!]
  6. Urbain, Jean-Pierre & Westerlund, Joakim, 2006. "Spurious Regression in Nonstationary Panels with Cross-Unit Cointegration," Research Memoranda 057, Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization. [Downloadable!]
  7. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July. [Downloadable!] (restricted)
    Other versions:
  8. Okunade, Albert A & Karakus, Mustafa C, 2001. "Unit Root and Cointegration Tests: Time-Series versus Panel Estimates for International Health Expenditure Models," Applied Economics, Taylor and Francis Journals, vol. 33(9), pages 1131-37, July. [Downloadable!] (restricted)
  9. Anindya Banerjee & Massimiliano Marcellino & Chiara Osbat, 2004. "Some cautions on the use of panel methods for integrated series of macroeconomic data," Econometrics Journal, Royal Economic Society, vol. 7(2), pages 322-340, December. [Downloadable!] (restricted)
    Other versions:
  10. Okunade, Albert A., 2004. "Concepts, measures, and models of technology and technical progress in medical care and health economics," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(3), pages 363-368, July. [Downloadable!] (restricted)
  11. McCoskey, Suzanne K. & Selden, Thomas M., 1998. "Health care expenditures and GDP: panel data unit root test results," Journal of Health Economics, Elsevier, vol. 17(3), pages 369-376, June. [Downloadable!] (restricted)
  12. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November. [Downloadable!] (restricted)
  13. Peter C.B. Phillips, 1993. "Fully Modified Least Squares and Vector Autoregression," Cowles Foundation Discussion Papers 1047, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  14. Newey, Whitney K & West, Kenneth D, 1994. "Automatic Lag Selection in Covariance Matrix Estimation," Review of Economic Studies, Blackwell Publishing, vol. 61(4), pages 631-53, October. [Downloadable!] (restricted)
    Other versions:
  15. Jennifer Roberts, 1999. "Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 459-472.
  16. Kaddour Hadri, 2000. "Testing for stationarity in heterogeneous panel data," Econometrics Journal, Royal Economic Society, vol. 3(2), pages 148-161.
    Other versions:
  17. Jewell, Todd & Lee, Junsoo & Tieslau, Margie & Strazicich, Mark C., 2003. "Stationarity of health expenditures and GDP: evidence from panel unit root tests with heterogeneous structural breaks," Journal of Health Economics, Elsevier, vol. 22(2), pages 313-323, March. [Downloadable!] (restricted)
  18. Nelson C. Mark & Donggyu Sul, 2003. "Cointegration Vector Estimation by Panel DOLS and Long-run Money Demand," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 65(5), pages 655-680, December. [Downloadable!] (restricted)
    Other versions:
  19. Bai, Jushan, 2004. "Estimating cross-section common stochastic trends in nonstationary panel data," Journal of Econometrics, Elsevier, vol. 122(1), pages 137-183, September. [Downloadable!] (restricted)
  20. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
    Other versions:
Full references

Cited by:
(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. Roel van Elk & Esther Mot & Philip Hans Franses, 2009. "Modelling health care expenditures," CPB Discussion Papers 121, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  2. 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. [Downloadable!]
  3. Miguel Ramirez, 2007. "A Panel Unit Root and Panel Cointegration Test of the Complementarity Hypothesis in the Mexican Case: 1960–2001," Atlantic Economic Journal, International Atlantic Economic Society, vol. 35(3), pages 343-356, September. [Downloadable!] (restricted)
    Other versions:
  4. Badi H. Baltagi & Francesco Moscone, 2009. "Health Care Expenditure and Income in the OECD Reconsidered: Evidence from Panel Data," Discussion Papers in Economics 09/5, Department of Economics, University of Leicester. [Downloadable!]
  5. Ramirez, Miguel D., 2008. "Are Foreign and Public Capital Productive in the Mexican Case? A Panel Unit Root and Panel Cointegration Analysis," Working Papers 49, Yale University, Department of Economics. [Downloadable!]
  6. 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. [Downloadable!]
  7. Felicitas Nowak-Lehmann D. & Dierk Herzer & Sebastian Vollmer & Inmaculada Martínez-Zarzoso, 2006. "Chile´s Market Share in the EU Market: The Role of Price Competition in a Panel Analysis Setting," Ibero America Institute for Econ. Research (IAI) Discussion Papers 139, Ibero-America Institute for Economic Research. [Downloadable!]
  8. Andrea Leiter & Engelbert Theurl, 2009. "The Convergence of Health Care Financing Structures: Empirical Evidence from OECD-Countries," NRN working papers 2009-12, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria. [Downloadable!]
  9. Chakroun, Mohamed, 2009. "Health care expenditure and GDP: An international panel smooth transition approach," MPRA Paper 14322, University Library of Munich, Germany. [Downloadable!]
Statistics
Access and download statistics

Did you know? The most prolific authors have over 700 items listed on IDEAS.

This page was last updated on 2009-12-14.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.