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Convergence of Total Health Expenditure as a Share of GDP: Evidence from Selected OECD Countries

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  • Fallahi, Firouz

Abstract

This paper studies convergence in the ratio of total health expenditures to GDP (HEGDP) for a sample of OECD countries over the period 1960-2006. Stochastic convergence is tested using unit root tests, without and with a structural break. Moreover, beta-convergence is examined by applying a method that allows for a structural break and is robust to the presence of unit roots and serial correlation in the errors. We examine whether these countries (1) are converging to the US in terms of HEGDP and (2) share a common structural break. The results support the existence of stochastic convergence for all countries. beta-convergence, however, is supported for some countries only before the break points (regime 1). In regime 2 (the period after the break points) all countries are experiencing divergence. In addition, the estimated break dates are clustered around 1981 and 1988.

Suggested Citation

  • Fallahi, Firouz, 2011. "Convergence of Total Health Expenditure as a Share of GDP: Evidence from Selected OECD Countries," MPRA Paper 51324, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:51324
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    References listed on IDEAS

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    1. repec:spr:soinre:v:133:y:2017:i:1:d:10.1007_s11205-016-1357-7 is not listed on IDEAS
    2. Nicholas Apergis & Tsangyao Chang & Christina Christou & Rangan Gupta, 2017. "Convergence of Health Care Expenditures Across the US States: A Reconsideration," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(1), pages 303-316, August.

    More about this item

    Keywords

    convergence; structural breaks; health expenditure; OECD; GDP.;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • I10 - Health, Education, and Welfare - - Health - - - General

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