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Progressivity of Out-of-Pocket Payments and its Determinants Decomposed Over Time

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  • Steven F. Koch

    (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, Republic of South Africa)

  • Naomi Setshegetso

    (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, Republic of South Africa and Department of Economics, University of Botswana, Gaborone, South-East District, Republic of Botswana)

Abstract

This study estimates progressivity of out-of-pocket (OOP) health payments and their determinants using South African Income and Expenditure Surveys. Concentration is decomposed to examine the effect of household determinants on OOP inequality, shedding light on how progressivity/regressivity is related to changes in the concentration and elasticities of the determinants over time. Our results suggest that actual OOP health expenditures are concentrated among non-poor households, although less so now than in the recent past. When OOP health payments are viewed from the perspective of affordability, which instead focuses on the share of payments relative to capacity-to-pay, they are regressive; However, they have become less concentrated amongst poor households, although still regressive, recently. These results appear to be independent of the measure of socioeconomic status employed in the analysis. The results highlight large income and education related disparities and also suggest continued gender and ethnic differences that deserve further attention in policymaking.

Suggested Citation

  • Steven F. Koch & Naomi Setshegetso, 2020. "Progressivity of Out-of-Pocket Payments and its Determinants Decomposed Over Time," Working Papers 2020112, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:2020112
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    References listed on IDEAS

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