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Medical Technology and the Production of Health Care

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Author Info

  • Baltagi, Badi H.

    ()
    (Syracuse University)

  • Moscone, Francesco

    ()
    (Brunel University)

  • Tosetti, Elisa

    ()
    (University of Cambridge)

Abstract

This paper investigates the factors that determine differences across OECD countries in health outcomes, using data on life expectancy at age 65, over the period 1960 to 2007. We estimate a production function where life expectancy depends on health and social spending, lifestyle variables, and medical innovation. Our first set of regressions include a set of observed medical technologies by country. Our second set of regressions proxy technology using a spatial process. The paper also tests whether in the long-run countries tend to achieve similar levels of health outcomes. Our results show that health spending has a significant and mild effect on health outcomes, even after controlling for medical innovation. However, its short-run adjustments do not seem to have an impact on health care productivity. Spatial spill overs in life expectancy are significant and point to the existence of interdependence across countries in technology adoption. Furthermore, nations with initial low levels of life expectancy tend to catch up with those with longer-lived populations.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5545.

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Length: 23 pages
Date of creation: Mar 2011
Date of revision:
Publication status: published in: Empirical Economics, 2012, 42 (2), 395-411
Handle: RePEc:iza:izadps:dp5545

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Keywords: health expenditure; health care production; life expectancy; spatial dependence;

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Citations

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Cited by:
  1. Peter Eibich & Nicolas R. Ziebarth, 2013. "Examining the Structure of Spatial Health Effects in Germany Using Hierarchical Bayes Models," SOEPpapers on Multidisciplinary Panel Data Research 620, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Moscone, Francesco & Tosetti, Elisa & Costantini, Marco & Ali, Maged, 2013. "The impact of scientific research on health care: Evidence from the OECD countries," Economic Modelling, Elsevier, vol. 32(C), pages 325-332.
  3. Spyros Arvanitis & Euripidis N. Loukis, 2014. "Investigating the Effects of ICT on Innovation and Performance of European Hospitals: An Exploratory Study," KOF Working papers 14-366, KOF Swiss Economic Institute, ETH Zurich.
  4. Reibling, Nadine, 2013. "The international performance of healthcare systems in population health: Capabilities of pooled cross-sectional time series methods," Health Policy, Elsevier, vol. 112(1), pages 122-132.

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