Health care expenditure and income in Canada: Evidence from panel data

Zuzana Janko and Venoo Kakar

Health Economics, 2023, vol. 32, issue 10, 2278-2297

Abstract: This paper investigates the long‐run relationship between health care expenditures (HCE) and income using Canadian provincial data spanning a period of 40 years from 1981 to 2020. We study the non‐stationary and cointegration properties of HCE and income and estimate the long‐run income elasticities of HCE. Using heterogeneous panel models that incorporate cross‐section dependence via unobserved common correlated factors to capture global shocks, we estimate long‐run income elasticities that lie in the 0.11–0.16 range. Our results indicate that health care is a necessity good for Canada. These elasticity estimates are much smaller than those estimated in other studies for Canada. We find that HCE and income in Canada are cointegrated and that short‐run changes in federal transfers significantly and positively affect HCE.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/hec.4730

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:wly:hlthec:v:32:y:2023:i:10:p:2278-2297

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().