Health care expenditure and income in the OECD reconsidered: Evidence from panel data
This paper reconsiders the long-run economic relationship between health care expenditure and income using a panel of 20 OECD countries observed over the period 1971-2004. In particular, the paper studies the non-stationarity and cointegration properties between health care spending and income. This is done in a panel data context controlling for both cross-section dependence and unobserved heterogeneity. Cross-section dependence is modelled through a common factor model and through spatial dependence. Heterogeneity is handled through fixed effects in a panel homogeneous model and through a panel heterogeneous model. Our findings suggest that health care is a necessity rather than a luxury, with an elasticity much smaller than that estimated in previous studies.
Year of publication: |
2010
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Authors: | Baltagi, Badi H. ; Moscone, Francesco |
Published in: |
Economic Modelling. - Elsevier, ISSN 0264-9993. - Vol. 27.2010, 4, p. 804-811
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Publisher: |
Elsevier |
Keywords: | Health expenditure Income elasticity Cross-section dependence Heterogeneous panels Factor models |
Saved in:
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