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Consumption expenditure on Health and Education: Econometric models and evolution of OECD countries 1970-96

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  • Guisan, M.C.
  • Arranz, M.

Abstract

We analyse the evolution of Private Consumption on two special groups of expenditure: Health, and Education and Culture, having into account that there are some substitution effects between public and private expenditure on both groups. The comparison is made with data of real private expenditure by inhabitant, at 1990 prices and exchange rates, for 13 OECD countries in the period 1970-94 and with data of real public and private expenditure by inhabitant for 24 countries in the year 1996. We estimate some econometric models for private expenditure and the results confirm the existence of the substitution effect and that this effect seems to be higher in the case of Health. From the analysis of the evolution of these variable our main conclusion is that the to increase the expenditure on both groups, with economic development, is positive for welfare and obeys to a rational behaviour of consumers. So we do not agree with the propositions and attempts to cut public expenditure on these important services, which sometimes are made in the name of a kind economic efficiency that do not have into account, in the desirable degree, the quality of services and social welfare.

Suggested Citation

  • Guisan, M.C. & Arranz, M., 2001. "Consumption expenditure on Health and Education: Econometric models and evolution of OECD countries 1970-96," Economic Development 50, University of Santiago de Compostela. Faculty of Economics and Business. Econometrics..
  • Handle: RePEc:eaa:ecodev:50
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    References listed on IDEAS

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    1. Arranz, M., 1996. "Forecasting Private Consumption Structure in European Countries: SKIM Model Results and Comparison with other Approaches," Faculty of Economics 04, Universidad de Santiago de Compostela, Faculty of Economics, Applied Econometric and Quantitative Studies.
    2. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
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    1. Arranz, M., 1996. "Forecasting Private Consumption Structure in European Countries: SKIM Model Results and Comparison with other Approaches," Faculty of Economics 04, Universidad de Santiago de Compostela, Faculty of Economics, Applied Econometric and Quantitative Studies.
    2. GUISAN, Maria-Carmen, 2023. "Development in the OECD, 1960-2000: Econometric Models and Indicators," ESTUDIOS ECONOMICOS EECHAPTER, in: M. Carmen Guisan Seijas (ed.), Education And International Development, 1960-2000: Economic Studies Of Oecd Countries, Latin America, Europe, Africa And Asia,, edition 1, volume 1, chapter 2, pages 33-62, Euro-American Association of Economic Development.
    3. GUISAN, Maria-Carmen, 2023. "Health Resources and Scores in European Countries, 1996-2019: Expenditure per capita and Rates of Doctors, Nurses and Beds in France, Germany, Italy, Spain, Switzerland and the UK," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 23(1), pages 111-130.

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    More about this item

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I1 - Health, Education, and Welfare - - Health
    • I2 - Health, Education, and Welfare - - Education
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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