Haider, Adnan and Butt, M. Sabihuddin (2006): The Direction of Causality between Health Spending and GDP: The Case of Pakistan. Published in: Pakistan Economic and Social Review , Vol. 45, No. 1 (5. March 2007): pp. 125140.

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Abstract
Relevant literature suggests that the most important determinant of health care spending is real GDP. Moreover, there is considerable evidence that health care spending rises at a faster rate than real GDP. This paper uses recently developed tests for the existence of a long run relationship to analyze the links between health care spending and GDP. We are, particularly, interested in estimating the elasticity parameter. The aim of the paper is to provide a new method of analysis to those used in recent papers on this subject. Typically in applied analysis, testing for the existence of cointegration and causality can only be carried out once the time series properties of the data have been established. For example, tests for cointegration require the variables to integrated of the same order, typically I(1), prior to estimation. By eliminating the need for unit root pretesting, the tests applied here considerably simplify the inference procedure. They also reduce the potential for distortions in the inference due to the unknown properties of the testing sequence. Our findings include robust evidence that, for Pakistan, the income elasticity for health care spending is greater than one and that the elasticity value is stable over the estimation period.
Item Type:  MPRA Paper 

Original Title:  The Direction of Causality between Health Spending and GDP: The Case of Pakistan 
Language:  English 
Keywords:  Health Spending; GDP; Causality 
Subjects:  H  Public Economics > H5  National Government Expenditures and Related Policies > H51  Government Expenditures and Health C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C12  Hypothesis Testing: General C  Mathematical and Quantitative Methods > C2  Single Equation Models; Single Variables > C22  TimeSeries Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models 
Item ID:  23379 
Depositing User:  Adnan Haider Adnan 
Date Deposited:  22. Jun 2010 16:01 
Last Modified:  15. Feb 2013 04:45 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/23379 