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Economic Growth and Public Healthcare Expenditure in Kenya (1982 - 2012)

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  • Nyamwange, Mathew

Abstract

This study advices on a suitable strategy for financing healthcare in Kenya as the sector faces challenges of underfunding with an increased demand of quality and availability of health care services that are equitable and affordable for a growing population.The study examines the effect of per capita gross domestic product (GDP per capita) on public healthcare expenditure (PHCE) in Kenya, and uses estimates of public recurrent & development expenditures, (1982 - 2012), as well as the economic survey and statistical abstracts for the same years. The analysis is a time series estimation of the effect of per capita gross domestic product on public healthcare expenditure, so as to explain the minimum amount of funding that the government should direct to public healthcare expense given future predictions of GDP per capita by institutions like World Bank. The study employs OLS regression and checks for co-integration on the long-run relationship between PHCE and GDP per capita, as well as other tests of granger causality, unit root presence and stationarity and study attempts to determine the properties of healthcare in Kenya. Results reveal that healthcare in Kenya is a necessary good and has an elasticity of 0.024% to GDP per capita. This is to mean that for every 1% increase in GDP per capita, PHCE should increase by 0.024%.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43707.

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Date of creation: 06 Nov 2012
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Handle: RePEc:pra:mprapa:43707

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Keywords: Public Healthcare Expenditure; Economic Growth; Kenya Healthcare Financing;

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  1. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  2. Thomas Barnay & Olivier Damette, 2012. "What drives Health Care Expenditure in France since 1950?," Working Papers hal-00717435, HAL.
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