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Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross-Sectionally Dependent Panel

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  • de Mello-Sampayo, Felipa
  • de Sousa-Vale, Sofia

Abstract

This paper analyses the relationship between health expenditure and the way it is financed using a panel of 30 OECD countries observed since the 1990s. In particular, the nonstationarity and cointegration properties between health care spending and its sources of funding, income and non-income variables are studied. This is performed in a panel data context controlling for both cross-section dependence and unobserved heterogeneity. The findings suggest that when health care expenditure is mainly nanced by government it becomes highly inelastic, with an income elasticity much smaller than expected, controlling for dependency rates for old and young age structure and technological progress.

Suggested Citation

  • de Mello-Sampayo, Felipa & de Sousa-Vale, Sofia, 2012. "Financing Health Care Expenditure in the OECD Countries: Evidence from a Heterogeneous, Cross-Sectionally Dependent Panel," MPRA Paper 41073, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:41073
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    More about this item

    Keywords

    Health Expenditure; Drivers of Health Expenditure; Panel Unit Root Tests; Panel Cointegration; Cross Section Dependence model;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I10 - Health, Education, and Welfare - - Health - - - General

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