Income and healthcare financing system in the United States: an asymmetric analysis

Mehdi Barati and Hadiseh Fariditavana

Journal of Economic Studies, 2021, vol. 49, issue 5, 809-820

Abstract: Purpose - The purpose of this study is to first assess how the US healthcare financing system is influenced by income variation. Then, it examines whether or not the impact of income variation is asymmetric. Design/methodology/approach - For the analyses of this paper, the autoregressive distributed lag (ARDL) model is implemented to a data set covering the period from 1960 to 2018. Findings - The results provide evidence that major funding sources of aggregate healthcare expenditure (HCE) respond differently to changes in income. The results also imply that the effect of income is not always symmetric. Originality/value - Many studies have attempted to identify the relationship between income and HCE. A common feature of past studies is that they have only focused on aggregate HCE, while one might be interested in knowing how major funders of aggregate HCE would be affected by changes in income. Another common feature of past studies is that they have assumed that the relationship between income and HCE is symmetric.

Keywords: Healthcare expenditure; Healthcare finance; non-linear ARDL; Asymmetry effect; Income elasticity of healthcare expenditure; H51; I10 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jespps:jes-12-2020-0592

DOI: 10.1108/JES-12-2020-0592

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