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What drives Health Care Expenditure in France since 1950?

  • Thomas Barnay

    (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée)

  • Olivier Damette

    ()

    (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée)

Using the French annual database (1950-2009), we conducted a time-series analysis to explain the role of GDP per capita on HCE (Health Care Expenditure) per capita taking into account structural breaks and non-linearity in the long-term economic relationship between HCE and GDP, controlling for price effect, population ageing, innovation proxy and medical density. We show that the non-linearity of the long-run relationship between HCE and GDP comes from both the presence of a structural break and non-linearity explained by a transition variable (by constructing a smooth transition cointegrating regression). More precisely, lower GDP elasticity is explained by an exogenous shock linked to health system policies in the mid 1980's (break analysis) and endogenously driven changes in the health care system via medical density in France.

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Paper provided by HAL in its series Working Papers with number hal-00717435.

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Date of creation: 01 May 2012
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Handle: RePEc:hal:wpaper:hal-00717435
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  1. Hansen, Bruce E. & Seo, Byeongseon, 2002. "Testing for two-regime threshold cointegration in vector error-correction models," Journal of Econometrics, Elsevier, vol. 110(2), pages 293-318, October.
  2. F. Moscone & E. Tosetti, 2010. "Health expenditure and income in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 19(12), pages 1385-1403, December.
  3. Zivot, Eric & Andrews, Donald W K, 1992. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 10(3), pages 251-70, July.
  4. Baltagi, Badi H. & Moscone, Francesco, 2010. "Health Care Expenditure and Income in the OECD Reconsidered: Evidence from Panel Data," IZA Discussion Papers 4851, Institute for the Study of Labor (IZA).
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  8. Jennifer Roberts, 1999. "Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 459-472.
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  10. 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.
  11. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
  12. Jewell, Todd & Lee, Junsoo & Tieslau, Margie & Strazicich, Mark C., 2003. "Stationarity of health expenditures and GDP: evidence from panel unit root tests with heterogeneous structural breaks," Journal of Health Economics, Elsevier, vol. 22(2), pages 313-323, March.
  13. Donald Freeman, 2003. "Is health care a necessity or a luxury? Pooled estimates of income elasticity from US state-level data," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 495-502.
  14. Bent Nielsen & Soren Johansen and Rocco Mosconi, 2000. "Cointegration analysis in the presence of structural breaks in the deterministic trend," Economics Series Working Papers 2000-W22, University of Oxford, Department of Economics.
  15. Hitiris, Theo & Posnett, John, 1992. "The determinants and effects of health expenditure in developed countries," Journal of Health Economics, Elsevier, vol. 11(2), pages 173-181, August.
  16. Saikkonen, Pentti & Choi, In, 2004. "Cointegrating Smooth Transition Regressions," Econometric Theory, Cambridge University Press, vol. 20(02), pages 301-340, April.
  17. Frédéric Rupprecht & Alain Quinet & Yannick L'Horty, 1997. "Expliquer la croissance des dépenses de santé : le rôle du niveau de vie et du progrès technique," Économie et Prévision, Programme National Persée, vol. 129(3), pages 257-268.
  18. Jushan Bai & Serena Ng, 2001. "A Panic Attack on Unit Roots and Cointegration," Economics Working Paper Archive 469, The Johns Hopkins University,Department of Economics.
  19. Narayan, Paresh Kumar, 2006. "Examining structural breaks and growth rates in international health expenditures," Journal of Health Economics, Elsevier, vol. 25(5), pages 877-890, September.
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