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Health Care is not a Luxury: Evidence from OECD data


  • Anindya Sen

    (Department of Economics, University of Waterloo)


Most research using cross-country data find income elasticities with respect to health expenditure equal to or exceeding unity. These results might be confounded due to omitted variables bias as well the presence of unobserved country and year specific determinants of per capita health expenditures. Empirical results from fifteen OECD countries between 1990 and 1998 support these hypotheses. Specifically, OLS coefficient estimates drop by roughly more than 50% with the use of two way fixed effects models and the inclusion of various demand and supply based determinants of per capita health expenditrues.

Suggested Citation

  • Anindya Sen, 2002. "Health Care is not a Luxury: Evidence from OECD data," Working Papers 02006, University of Waterloo, Department of Economics, revised Jan 2002.
  • Handle: RePEc:wat:wpaper:02006

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