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Bubbles in health care: Evidence from the U.S., U.K., and German stock markets

Author

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  • Chen, Mei-Ping
  • Lin, Yu-Hui
  • Tseng, Chun-Yao
  • Chen, Wen-Yi

Abstract

This study applies the GSADF test to locate multiple bubbles in the health care sector (HCS) of the U.S., U.K., and German stock markets. The panel switching model is estimated to evaluate to what extent money supply, economic growth, and stock returns from local markets influence stock returns from the HCS. Our empirical model not only identifies one bubble (two bubbles) in the HCS of the U.S. and German stock markets (U.K. stock market) but also suggests that the local stock market returns play an important role in determining stock returns from the HCS in both bubble and normal regimes.

Suggested Citation

  • Chen, Mei-Ping & Lin, Yu-Hui & Tseng, Chun-Yao & Chen, Wen-Yi, 2015. "Bubbles in health care: Evidence from the U.S., U.K., and German stock markets," The North American Journal of Economics and Finance, Elsevier, vol. 31(C), pages 193-205.
  • Handle: RePEc:eee:ecofin:v:31:y:2015:i:c:p:193-205
    DOI: 10.1016/j.najef.2014.11.003
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    References listed on IDEAS

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    Cited by:

    1. Tai, Meng-Yi & Chao, Chi-Chur & Hu, Shih-Wen, 2015. "Pollution, health and economic growth," The North American Journal of Economics and Finance, Elsevier, vol. 32(C), pages 155-161.
    2. Batabyal, Sanjana S. & Batabyal, Amitrajeet A., 2018. "Medical decision-making by patients and providers under uncertainty and in the presence of antibiotic resistance," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 604-613.
    3. Chen, Mei-Ping & Chen, Wen-Yi & Tseng, Tseng-Chan, 2017. "Co-movements of returns in the health care sectors from the US, UK, and Germany stock markets: Evidence from the continuous wavelet analyses," International Review of Economics & Finance, Elsevier, vol. 49(C), pages 484-498.
    4. Yang Hu & Les Oxley, 2018. "Bubbles in US regional house prices: evidence from house price–income ratios at the State level," Applied Economics, Taylor & Francis Journals, vol. 50(29), pages 3196-3229, June.

    More about this item

    Keywords

    Bubbles; Health care; Generalized supremum augmented Dickey–Fuller (GSADF) test; Panel switching regression;

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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