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Health Care Expenditure And Gdp: An African Perspective

  • JAUNKY, V.C

    ()

  • KHADAROO, A.J.

    ()

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    This paper sheds light on the income elasticity of health care expenditure in Africa. The existing literature has to date focused on developed countries due to scarcity of health expenditure data in developing countries. We herein exploit panel data techniques, combining time-series and cross-section data, which enable a substantial increase in testing power. Income elasticity of health care expenditure for 28 African countries over the decade 1991 – 2000 is investigated. In addition to aggregate health expenditure, we model public and private health expenditures separately. In both the short-run and long-run, public health expenditure is found to be a luxury while private health expenditure a necessity. This is not too surprising in the context of Africa, where the public sector has to strive hard to provide basic health care to the poor majority but where a rich minority can easily afford hi-tech private health care. Furthermore the income elasticity of public health expenditure is found to be pro-cyclical while that of private health expenditure is counter-cyclical, thereby reinforcing our previous finding.

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    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 8 (2008)
    Issue (Month): 1 ()
    Pages: 131-146

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    Handle: RePEc:eaa:aeinde:v:8:y:2008:i:1_11
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    1. Karras, Georgios, 2003. "Trade Openness And Economic Growth Can We Estimate The Precise Effect?," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 3(1).
    2. Sergio T. Rebelo, 1990. "Long Run Policy Analysis and Long Run Growth," NBER Working Papers 3325, National Bureau of Economic Research, Inc.
    3. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    4. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
    5. Paul Romer, 1989. "Endogenous Technological Change," NBER Working Papers 3210, National Bureau of Economic Research, Inc.
    6. Ben S. Bernanke & Refet S. Gurkaynak, 2001. "Is Growth Exogenous? Taking Mankiw, Romer and Weil Seriously," NBER Working Papers 8365, National Bureau of Economic Research, Inc.
    7. William A. Brock & M. Scott Taylor, 2004. "The Green Solow Model," NBER Working Papers 10557, National Bureau of Economic Research, Inc.
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