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On the relationship between GDP and health care expenditure: A new look

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Listed author(s):
  • Lago-Peñas, Santiago
  • Cantarero-Prieto, David
  • Blázquez-Fernández, Carla

Abstract

In this paper we analyze the relationship between income and health expenditure in 31 Organization for Economic Cooperation and Development (OECD) countries. We focus on the differences between short and long term elasticities and we also check the adjustment process of health care expenditure to changes in per capita Gross Domestic Product (GDP) and its cyclical and trend components. In both cases, we test if results differ in countries with a higher share of private expenditure on total health expenditure. Econometric results show that the long-run income elasticity is close to unity, that health expenditure is more sensitive to per capita income cyclical movements than to trend movements, and that the adjustment to income changes in those countries with a higher share of private health expenditure over total expenditure is faster.

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File URL: http://www.sciencedirect.com/science/article/pii/S0264999313000242
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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 124-129

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Handle: RePEc:eee:ecmode:v:32:y:2013:i:c:p:124-129
DOI: 10.1016/j.econmod.2013.01.021
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

Keywords: GDP; Health care expenditure; OECD; Panel data; Income elasticity;

Find related papers by JEL classification:

  • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
  • I1 - Health, Education, and Welfare - - Health
  • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
  • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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  1. Anindya Sen, 2005. "Is Health Care a Luxury? New Evidence from OECD Data," International Journal of Health Economics and Management, Springer, vol. 5(2), pages 147-164, June.
  2. Carrion-i-Silvestre, Josep Lluis, 2005. "Health care expenditure and GDP: Are they broken stationary?," Journal of Health Economics, Elsevier, vol. 24(5), pages 839-854, September.
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Cited by:

  1. Serdar Kurt, 2015. "Government Health Expenditures and Economic Growth: A Feder–Ram Approach for the Case of Turkey," International Journal of Economics and Financial Issues, Econjournals, vol. 5(2), pages 441-447.
  2. Mahmut ZORTUK & Sinan ÇEKEN, 2015. "The Relationship between Health Care Expenditures and Income in the Selected Transition Economies: A Panel Smooth Transition Regression Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 105-118, June.
  3. Nadide Sevil Halıcı-Tülüce & İbrahim Doğan & Cüneyt Dumrul, 2016. "Is income relevant for health expenditure and economic growth nexus?," International Journal of Health Economics and Management, Springer, vol. 16(1), pages 23-49, March.
  4. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
  5. M. Marković & S. Zdravković & M. Mitrović & A. Radojičić, 2016. "An Iterative Multivariate Post Hoc I-Distance Approach in Evaluating OECD Better Life Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 126(1), pages 1-19, March.
  6. Huarng, Kun-Huang & Yu, Tiffany Hui-Kuang, 2015. "Healthcare expenditure with causal recipes," Journal of Business Research, Elsevier, vol. 68(7), pages 1570-1573.
  7. Maciej Lis, 2015. "Red Herring in the Vistula River: Time-to-Death and Health Care Expenditure," IBS Working Papers 13/2015, Instytut Badan Strukturalnych.
  8. Alper Aslan & Angeliki N. Menegaki & Can Tansel Tugcu, 2016. "Health and economic growth in high-income countries revisited: evidence from an augmented production function for the period 1980–2009," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 937-953, March.

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