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Regional inequality in China's health care expenditures

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  • Win Lin Chou
  • Zijun Wang

Abstract

This paper has two parts. The first part examines the regional health expenditure inequality in China by testing two hypotheses on health expenditure convergence. Cross-section regressions and cluster analysis are used to study the health expenditure convergence and to identify convergence clusters. We find no single nationwide convergence, only convergence by cluster. In the second part of the paper, we investigate the long‐run relationship between health expenditure inequality, income inequality, and provincial government budget deficits (BD) by using new panel cointegration tests with health expenditure data in China's urban and rural areas. We find that the income inequality and real provincial government BD are useful in explaining the disparity in health expenditure prevailing between urban and rural areas. In order to reduce health‐spending inequality, one long‐run policy suggestion from our findings is for the government to implement more rapid economic development and stronger financing schemes in poorer rural areas. Copyright (C) 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Win Lin Chou & Zijun Wang, 2009. "Regional inequality in China's health care expenditures," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 137-146, July.
  • Handle: RePEc:wly:hlthec:v:18:y:2009:i:s2:p:s137-s146
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    File URL: http://hdl.handle.net/10.1002/hec.1511
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    References listed on IDEAS

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    1. Joakim Westerlund & David L. Edgerton, 2008. "A Simple Test for Cointegration in Dependent Panels with Structural Breaks," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(5), pages 665-704, October.
    2. Westerlund, Joakim & Edgerton, David L., 2007. "A panel bootstrap cointegration test," Economics Letters, Elsevier, vol. 97(3), pages 185-190, December.
    3. Liu, Yuanli & Hsiao, William C. & Eggleston, Karen, 1999. "Equity in health and health care: the Chinese experience," Social Science & Medicine, Elsevier, vol. 49(10), pages 1349-1356, November.
    4. Zhang, Xiaobo & Kanbur, Ravi, 2005. "Spatial inequality in education and health care in China," China Economic Review, Elsevier, vol. 16(2), pages 189-204.
    5. Bart Hobijn & Philip Hans Franses, 2000. "Asymptotically perfect and relative convergence of productivity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(1), pages 59-81.
    6. Theo Hitiris & John Nixon, 2001. "Convergence of health care expenditure in the EU countries," Applied Economics Letters, Taylor & Francis Journals, vol. 8(4), pages 223-228.
    7. Chou, Win Lin, 2007. "Explaining China's regional health expenditures using LM-type unit root tests," Journal of Health Economics, Elsevier, vol. 26(4), pages 682-698, July.
    8. Gerdtham, Ulf-G. & Jonsson, Bengt, 2000. "International comparisons of health expenditure: Theory, data and econometric analysis," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 1, pages 11-53 Elsevier.
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    Citations

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    Cited by:

    1. Winnie Yip & Adam Wagstaff & William C. Hsiao, 2009. "Economic analysis of China's health care system: turning a new page," Health Economics, John Wiley & Sons, Ltd., vol. 18(S2), pages 3-6, July.
    2. Halvor Mehlum & Ragnar Torvik & Simone Valente, 2013. "China’s Savings Multiplier," Working Papers No 4/2013, Centre for Applied Macro- and Petroleum economics (CAMP), BI Norwegian Business School.
    3. Chen, Yuyu & Jin, Ginger Zhe, 2012. "Does health insurance coverage lead to better health and educational outcomes? Evidence from rural China," Journal of Health Economics, Elsevier, vol. 31(1), pages 1-14.
    4. Wen-Yi CHEN & Yu-Hui LIN, 2016. "Co-Movement of Healthcare Financing in OECD Countries: Evidence from Discrete Wavelet Analyses," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 40-56, September.
    5. Shen, Yuying, 2014. "Community building and mental health in mid-life and older life: Evidence from China," Social Science & Medicine, Elsevier, vol. 107(C), pages 209-216.
    6. Qin, Xuezheng & Hsieh, Chee-Ruey, 2014. "Economic growth and the geographic maldistribution of health care resources: Evidence from China, 1949-2010," China Economic Review, Elsevier, vol. 31(C), pages 228-246.
    7. JunQiang Liu & Tao Chen, 2013. "Sleeping money: investigating the huge surpluses of social health insurance in China," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 319-331, December.
    8. repec:bla:buecrs:v:68:y:2016:i:s1:p:146-170 is not listed on IDEAS
    9. Wen-Yi Chen, 2013. "Does healthcare financing converge? Evidence from eight OECD countries," International Journal of Health Economics and Management, Springer, vol. 13(3), pages 279-300, December.
    10. Masayoshi Hayashi, 2011. "The effects of medical factors on transfer deficits in Public Assistance in Japan: a quantile regression analysis," International Journal of Health Economics and Management, Springer, pages 287-307.
    11. Bonatti, Luigi & Fracasso, Andrea, 2014. "Modeling the Transition Towards Renminbi's Full Convertibility: Implications for China’s Growth," MPRA Paper 54129, University Library of Munich, Germany.
    12. Ambar, Rabnawaz, 2015. "Corruption, Inequality and Economic Growth," MPRA Paper 70375, University Library of Munich, Germany, revised 2015.
    13. Yip, Winnie & Hsiao, William, 2009. "China's health care reform: A tentative assessment," China Economic Review, Elsevier, vol. 20(4), pages 613-619, December.

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