A Time-Series Investigation of the U.S. Real Health Expenditure: Evidence from Nonlinear Unit Root Tests

Vasudeva Murthy ()

International Advances in Economic Research, 2012, vol. 18, issue 4, 429-438

Abstract: This paper contributes to the literature on health expenditure studies by applying the non-linear unit root tests formulated recently by Kapetanios et al. (Journal of Econometrics 112(2):359–79, 2003 ) to empirically test whether the U.S. real health expenditure time-series are non-stationary or non-linear and globally stationary during a relatively long period from 1965 to 2009. For comparison purposes, it also reports the results of a battery of traditional linear unit root tests and the Lee and Strazicich’s minimum LM unit root (Review of Economics and Statistics 85(4):1082–1089, 2003 ) test for structural breaks. The empirical findings of the paper show that in the United States during the period under investigation, the real health expenditure time-series are non-stationary in levels. Policy implications of the empirical findings are discussed. Copyright International Atlantic Economic Society 2012

Keywords: Health expenditure; Nonelinear unit roots tests (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/s11294-012-9374-z

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