The causal effect of catastrophic health expenditure on poverty in Poland

Aleksandra Kolasa and Ewa Weychert
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Ewa Weychert: University of Warsaw, Faculty of Economic Sciences

No 2022-23, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: Out-of-pocket medical expenses are a crucial source of health care financing in a number of countries, and thus a significant burden for many households. In particular, large health-related spending can lead to financial hardship and impoverishment. The aim of our study is to assess the direct impact of large out-of-pocket medical payments on household poverty, while properly accounting for endogeneity between these two variables. We use catastrophic health expenditure as a proxy for problematic health-related costs and estimate recursive bivariate probit models using Polish household-level panel data. We show that the causal relationship between catastrophic health expenditure and relative poverty is significant and positive across different methodological approaches. However, we find no empirical evidence that a one-time incidence of catastrophic health expenditure creates a poverty trap. We also show that using a poverty measure which treats out-of-pocket medical payments and food consumption as perfect substitutes can lead to an underestimation of poverty among the elderly.

Keywords: monetary poverty; catastrophic health expenditure; out-of-pocket medical expenses; recursive probit models (search for similar items in EconPapers)
JEL-codes: I14 I32 J14 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2022
New Economics Papers: this item is included in nep-hea
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https://www.wne.uw.edu.pl/download_file/2099/0 First version, 2022 (application/pdf)

Related works:
Journal Article: The causal effect of catastrophic health expenditure on poverty in Poland (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2022-23

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