On the relationship between GDP and health care expenditure: A new look

Santiago Lago-Peñas, David Cantarero () and Carla Blázquez-Fernández ()

Economic Modelling, 2013, vol. 32, issue C, 124-129

Abstract: In this paper we analyze the relationship between income and health expenditure in 31 Organization for Economic Cooperation and Development (OECD) countries. We focus on the differences between short and long term elasticities and we also check the adjustment process of health care expenditure to changes in per capita Gross Domestic Product (GDP) and its cyclical and trend components. In both cases, we test if results differ in countries with a higher share of private expenditure on total health expenditure. Econometric results show that the long-run income elasticity is close to unity, that health expenditure is more sensitive to per capita income cyclical movements than to trend movements, and that the adjustment to income changes in those countries with a higher share of private health expenditure over total expenditure is faster.

Keywords: GDP; Health care expenditure; OECD; Panel data; Income elasticity (search for similar items in EconPapers)
JEL-codes: H51 I1 I18 I38 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:32:y:2013:i:c:p:124-129

DOI: 10.1016/j.econmod.2013.01.021

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