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An outlier-robust extreme bounds analysis of the determinants of health-care expenditure growth

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Abstract

Hartwig (2008) has presented empirical evidence that the difference between real wage growth and productivity growth at the macroeconomic level is a robust explanatory variable for deflated health-care expenditure growth in OECD countries. In this paper, we test whether this finding is robust to the inclusion of additional covariates, applying different versions of Extreme Bounds Analysis (EBA) to data for 33 OECD countries over the period 1970-2010. As far as it is statistically feasible, all macroeconomic and institutional determinants of health-care expenditure growth that have been suggested in the literature are included in the EBA. Furthermore, we analyse to what extent outliers in the data influence the results using an outlier-robust MM estimator. Our results confirm Hartwig’s earlier finding. A number of additional both covariate- and outlier-robust determinants are also identified.

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Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 12-307.

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Length: 29 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:kof:wpskof:12-307

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Related research

Keywords: Health-care expenditure; ‘unbalanced growth’; Extreme Bounds Analysis; MM estimator; OECD panel;

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References

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  4. 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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Cited by:
  1. Hagen, Tobias, 2013. "The impact of national financial regulation on macroeconomic and fiscal performance after the 2007 financial shock: Econometric analyses based on cross-country data," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 7(33), pages 1-44.

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