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The determinants of health expenditure in Malaysia: A time series analysis

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  • Tang, Chor Foon

Abstract

The purpose of this study is to investigate the determinants of health expenditure in Malaysia within the time series framework from 1967 to 2007. This study employed the Johansen-Juselius cointegration test to examine the cointegration relationship. The results showed that health expenditure and its determinants are cointegrated. Consistent with economic theory, the TYDL and variance decomposition analysis reveals that the key explanatory variables in Malaysia’s health expenditure model are income, health care price and the proportion of population aged more than 65 years old. Moreover, the TYDL causality indicates that health expenditure and income is bi-directional in nature, thus policies initiative to promote health expenditure should be implemented to achieve sustainable economic growth and development.

Suggested Citation

  • Tang, Chor Foon, 2010. "The determinants of health expenditure in Malaysia: A time series analysis," MPRA Paper 24356, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:24356
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    More about this item

    Keywords

    Cointegration; Health; Income; Malaysia; TYDL;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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