A Quantile Regression Approach to Panel Data Analysis of Health Care Expenditure in OECD Countries

Fengping Tian (), Jiti Gao and Ke Yang ()

No 20/16, Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: This article investigates the variation in the effects of various determinants on the per capita health care expenditure. A total of 28 OECD countries are studied over the period 1990-2012, employing an instrumental variable quantile regression method for a dynamic panel model with fixed effects. The results show that the determinants of per capita health care expenditure do vary with the distribution of the health care expenditure growth, while the change patterns are dissimilar. Specifically, the lagged health spending growth has a significantly positive effect, with an effect that decreases towards the higher quantiles of growth of per capita health care expenditure. Per capita GDP has a significantly positive effect, both the short and long run income elasticities are smaller than one, and health care is a necessity. The density of physicians only has a significant negative effect at the lower tail of the distribution. The elderly population has the reverse effect at the lower and upper tails, and this shows an upward trend with the increase in health expenditure growth. Life expectancy has an effect similar to the proportion of the old. Variable representing Baumol's model of "unbalanced growth" theory has a significantly positive effect, and the change pattern of its influence shows a marked upward trend. However, one component of "Baumol variable", labor productivity, only shows significant effect in the low half of the distribution. More attention needs to be paid to the influence of determinants in health expenditure study.

Keywords: health care expenditure; quantile regression; OECD countries; unbalanced growth (search for similar items in EconPapers)
JEL-codes: C22 C23 I11 (search for similar items in EconPapers)
Pages: 26
Date: 2016
New Economics Papers: this item is included in nep-age and nep-hea
References: View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://business.monash.edu/econometrics-and-busine ... ions/ebs/wp20-16.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:msh:ebswps:2016-20

Ordering information: This working paper can be ordered from
http://business.mona ... -business-statistics

Access Statistics for this paper

More papers in Monash Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics PO Box 11E, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Professor Xibin Zhang ().