Effect of financial inclusion on out-of-pocket health expenditure: empirics from Ghana

Isaac Koomson, Abdallah Abdul-Mumuni () and Anthony Abbam ()
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Abdallah Abdul-Mumuni: University of Professional Studies
Anthony Abbam: University of Education

The European Journal of Health Economics, 2021, vol. 22, issue 9, No 7, 1425 pages

Abstract: Abstract Empirical evidence on the link between financial inclusion and out-of-pocket health expenditure remains sparse while existing studies have mainly not used a multidimensional financial inclusion index. This study examines the link between financial inclusion and out-of-pocket health expenditure in Ghana using data from the seventh round of the Ghana Living Standards Survey. To ensure robustness in findings, the standard instrumental variable (with external instruments) and Lewbel’s heteroskedasticity-based instrumental variable approaches are both applied. Our findings indicate that a standard deviation increase in financial inclusion is associated with an increase in households’ out-of-pocket health expenditure between 0.1367 and 1.7608 standard deviations. This finding is more pronounced for female-headed and urban-located households. Financial inclusion has a bigger association with expenses on medical products/appliances than on outpatient services. Policymakers are encouraged to design and implement programs to scale up the level of financial inclusion which has the potential of facilitating demand for health, thereby leading to better health outcomes.

Keywords: Financial inclusion; Health expenditure; Well-being; Development; Ghana (search for similar items in EconPapers)
JEL-codes: D03 D14 I12 I15 O12 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (10)

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DOI: 10.1007/s10198-021-01320-1

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