Health care expenditure and GDP: An international panel smooth transition approach

Chakroun, Mohamed (2009): Health care expenditure and GDP: An international panel smooth transition approach. Published in: International Journal of Economics , Vol. 4, No. 1 (June 2010)

Abstract

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
• Language: English
• Keywords: Health expenditure; Income elasticity; Panel smooth threshold regression models
• Subjects: I - Health, Education, and Welfare > I1 - Health

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