Erratum To “What Drives Health Care Expenditure?—Baumol’s Model of ‘Unbalanced Growth’ Revisited” [J. Health Econ. 27 (2008) 603–623]

Akinwande Atanda and W. Reed ()

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: In a recent paper, Atanda, Menclova and Reed (2018) use country-level panel data from the OECD and conclude that there is little evidence to support the existence of Baumol’s Cost Disease as an explanation for rising health costs. The result is surprising because Hartwig (2008), using similar data, comes to the opposite conclusion. We show that Hartwig tested an incorrect specification of a key hypothesis. When the correct specification is tested, his result vanishes, invalidating his conclusion. This provides a resolution for the conflict between the two studies.

Keywords: Baumol's cost disease; health care expenditures; health care costs; OECD; panel data (search for similar items in EconPapers)
JEL-codes: E24 I11 J30 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2018-10-01
New Economics Papers: this item is included in nep-mac
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