Chakroun, Mohamed (2009): Health care expenditure and GDP: An international panel smooth transition approach. Published in: International Journal of Economics , Vol. 3, No. 2 (December 2009)
Download (200Kb) | Preview
In this paper, we investigate the potential threshold effects in the relationship between national expenditures on health care and national income. Using a panel threshold regression model, we derive country-specific and time-specific income elasticities for 17 OECD countries over the period 1975–2003. In contrast to many previous analyses, our empirical results show that health care is a necessity rather than a luxury. Further, the relationship between health expenditure and income seems rather nonlinear, changing over time and across countries.
|Item Type:||MPRA Paper|
|Original Title:||Health care expenditure and GDP: An international panel smooth transition approach|
|Keywords:||Health expenditure; Income elasticity; Panel smooth threshold regression models|
|Subjects:||I - Health, Education, and Welfare > I1 - Health|
|Date Deposited:||25. Sep 2009 01:54|
|Last Modified:||22. Feb 2013 10:11|
Baumol, W.J. (1967) Macroeconomics of unbalanced growth: the anatomy of urban crisis. American Economic Review 57 (3), 415–426.
Baumol, W.J. (1993) Health care, education and the cost disease: a looming crisis for public choice. Public Choice 77 (1), 17–28.
Blomqvist, A.G., Carter, R.A.L. (1997) Is health care really a luxury? Journal of Health Economics 16 (2), 207–229.
Carrion-i-Silvestre, J.L. (2005) Health care expenditure and GDP: are they broken stationary? Journal of Health Economics 24 (5), 839–854.
Clemente, J., Marcuello, C., Montañés, A., Pueyo, F. (2004) On the international stability of health care expenditure functions: are government and private functions similar? Journal of Health Economics 23, 589–613.
Colletaz, G., Hurlin, C. (2006) Threshold effects in the public capital productivity: an international panel smooth transition approach. University of Orléans. Working paper.
Di Matteo, L., Di Matteo, R. (1998) Evidence on the determinants of Canadian provincial health expenditures 1965–1991. Journal of Health Economics 17 (2), 211–228.
Dreger, C., Reimers, H.E . (2005) Health care expenditures in OECD countries: a panel unit root and cointegration analysis. International Journal of Applied Econometrics and Quantitative Studies. Vol.2-2.
Felder, S., Meier, M., Schmitt, H. (2000) Health care expenditure in the last months of life. Journal of Health Economics 19, 679–695.
Feldstein, M. (1995) The economics of health and health care: what have we learned? What have I learned? AEA Papers and Proceeding 28, 31.
Fok, D., van Dijk, D., Franses, P. (2004) A multi-level panel STAR model for US manufacturing sectors. Working Paper University of Rotterdam.
Fouquau, J., Hurlin, C., Rabaud, I. (2008) The Feldstein–Horioka puzzle: a panel smooth transition regression approach. Economic Modelling 25, 284–299.
Gerdtham, U.-G., Lothgren, M. (2000) On stationarity and cointegration of international health expenditure and GDP. Journal of Health Economics 19 (4), 461–475.
Gerdtham, U.G., Sogaard, J., Andersson, F., Jonsson, B. (1992) An econometric analysis of health care expenditure: a cross-section study of the OECD countries, Journal of Health Economics 11, 63.
González, A., Teräsvirta, T., van Dijk, D. (2005) Panel smooth transition regression model. Working Paper Series in Economics and Finance, vol. 604.
Hall, R., Jones, C.I. (2005) The value of life and the rise in health spending. Working Paper.
Hansen, B.E. (1999) Threshold effects in non-dynamic panels: estimation, testing and inference. Journal of Econometrics 93, 345-368.
Hansen, P., King, A. (1996) The determinants of health care expenditure: a cointegration approach. Journal of Health Economics 15 (1), 127–137.
Hartwig, J. (2008)What drives health care expenditure?—Baumol’s model of ‘unbalanced growth’ revisited. Journal of Health Economics 27, 603–62.
Hitiris, T., Posnett, J. (1992) The determinants and effects of health expenditure in developed countries. Journal of Health Economics 11 (2), 173–181.
Hsiao, C. (2003) Analysis of panel data, econometric society monographs. Cambridge University Press.
Jewell, T., Lee, J., Tieslau, M., Strazicich, M.C. (2003) Stationarity of health expenditures and GDP: evidence from panel unit root tests with heterogeneous structural breaks. Journal of Health Economics 22 (2), 313–323.
Kleiman, E. (1974) The determinants of national outlays on health. In: Perlman, M. (Ed.), The Economics of Health and Medical Care. Macmillan, London.
Leu, R.E. (1986) The public–private mix and international health care costs. In: Culyer, A.J., Jönsson, B. (Eds.), Public and Private Health Care Services: Complementarities and Conflicts. Basil Blackwell, Oxford.
McCoskey, S.K., Selden, T.M. (1998) Health care expenditures and GDP: panel data unit root test results. Journal of Health Economics 17 (3), 369–376.
Newhouse, J. (1992) Medical care costs: how much welfare loss? Journal of Economic Perspectives 6 (3), 3–21.
Newhouse, J.P. (1977) Medical-care expenditure: a cross-national survey. Journal of Human Resources 12 (1), 115–125.
OECD. (2006) Projecting OECD health and long-term care expenditures: what are the main drivers? OECD Economics Department Working Papers, No. 477.
Okunade, A.A., Karakus, M.C. (2001) Unit root and cointegration tests: time-series versus panel estimates for international health expenditure models. Applied Economics 33 (9), 1131–1137.
Parkin, D., McGuire, A., Yule, B. (1987) Aggregate health care expenditures and national income: is health care a luxury good? Journal of Health Economics 6 (2), 109–127.
Pesaran, H.M., Smith, R. (1995) Estimating long-run relationships from dynamic heterogenous panels. Journal of Econometrics 68, 79-113.
Roberts, J., 1999. Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field. Health Economics 8 (5), 459–472.
Tosetti, E., Moscone, F. (2007) Health expenditure and income in the United States. University of Leicester, Working Paper No. 07/14.
Wanless, D. (2001) Securing our future health: taking a long-term view. Interim Report, HM Treasury, London.
Weisbrod, B. (1991) The health care quadrilemma: an essay on technological change, insurance, quality of care, and cost containment. Journal of Economic Literature 29, 523-552.
Available Versions of this Item
Health care expenditure and GDP: An international panel smooth transition approach. (deposited 27. Mar 2009 14:43)
- Health care expenditure and GDP: An international panel smooth transition approach. (deposited 25. Sep 2009 01:54) [Currently Displayed]