The determinants of access to health care and medicines in India

This article explores the issue of demand for health care and medicines in India where household share of total health expenditure is one of the highest among high- and low-income countries. Previous work found that important determinants include health status, socio-demographics, income and demand for care was inelastic. Compared with previous studies, this article uses large household data sets including data on medicine expenditure to explore health-seeking behaviour. Count models find that determinants include health status, socio-demographic information, health insurance, household expenditure and government regulation. Elasticities range from ?0.13 to 0.03 and are generally consistent with literature findings. For inpatient care, conditional on having at least one hospitalization, the expected number of hospitalizations increases with being male and household expenditure. Medicine expenditure accounts for a large share of household health expenditure. Low-income individuals could experience problems and raises important policy implications on the demand and supply side to improve access to health care and medicines for patients in India.     

Is health care a necessity or a luxury? Evidence from urban China

This article uses a smooth transition regression (STR) model to research the income elasticity of the health care expenditure of China’s urban residents in the 1990–2013 period. The results demonstrate that if the real income of China’s urban residents that lags a period is taken as a transition variable, urban residents’ health expenditure follows an LSTR1 nonlinear two-regime model. Here, the income elasticity of health care expenditure of China’s urban residents is 1.4919 in 1990–2002 and 1.2216 in 2003–2013. Overall, the income elasticity of health care of China’s urban residents is greater than 1, indicating that health care is a luxury.     

Advertising and the aggregate demand for cigarettes

The study specifies a model which explains aggregate demand for cigarettes in terms of price, income and advertising. Publicity about the health effects of smoking is treated as a form of ‘anti-advertising’. A distinctive feature is that an attempt is made to measure advertising in terms of ‘messages’ rather than using the more common, but theoretically inappropriate, expenditure measure. The model is tested against quarterly U.K. data for the period 1957 II to 1968 IV, using ordinary least squares (OLS) regression. The results suggest that advertising had a positive, statistically significant impact on sales, and that this impact was only partly offset by the amount of publicity given to the health effects of smoking.     

Is health care a luxury? The debate revisited with new evidence from emerging economies

This paper studies the long-run relationship between health care expenditure and income using a panel data set of emerging economies over the period 1995–2012. The results show that expenditure on health care and income are non-stationary and cointegrated. After controlling for cross-sectional dependence and unobserved heterogeneity among different countries, we find that the income elasticity of health care is less than 1, indicating that health care is a necessity and not a luxury. Government expenditure and out-of-pocket expenditure turn out to be important determinants of health care expenditure. Among non-monetary factors, results show that old age dependency and female education seem to have significant bearings on health care expenditures. Policy recommendations suggest that government should increase spending on health care in emerging economies since higher incomes may not automatically translate into higher health care spending by the people of these countries.     

Estimating leisure goods models on time series of cross sections

This paper analyses the joint modelling of labour supply and consumer expenditure in a utility maximizing framework. A recent demand system (AIDS) is augmented to include labour supply and incorporate time series/cross section wage rate variation and, then, estimated on pooled F.E.S. data [Family Expenditure Surveys]. A method of non linear FIML is applied. The paper questions the near unanimous ‘evidence’ on backward bending labour supply in previous studies and, using counter evidence, argues that such a bend could have been partly due to the restrictive utility forms usually employed. In addition, hypotheses relating to effects of price/wage movements on composition of ‘full income’ are tested, and the welfare implications of the estimated parameter estimates worked out.     

Spatial and economic patterns in life expectancy among US States

This study investigates the determinants of gender-specific life expectancy across US states over the period 1995–2007. We employ a production function specification where life expectancy depends on health expenditure, income, education and lifestyle variables, allowing for spatial effects. Empirical results suggest that education attainment and health expenditure are the main factors behind improving longevity, whereas smoking bears a strong negative influence. For robustness purposes, we also use health spending as well as education criteria, apart from geographical ones to model interstate spillovers. In the former case, states with similar health expenditure are ‘neighbors’ and affect positively the life expectancy process. If education is applied instead of health spending together with geographic proximity, the spatial correlation is insignificant, i.e. education ‘neighbors’ do not affect life expectancy. Our findings do not imply significant gender differences regarding health production. The results suggest that health care policy will have to focus on wider economic and social considerations, like education and lifestyle changes, except medical care provision in order to exploit the full potential for life expectancy improvements of the US population.     

Provincial government expenditures in Canada: an empirical analysis

Most empirical studies have sought to explain the overall growth of the total government expenditures. Few studies have focused on the growth of spending at the provincial level. This article seeks to fill the gap. It examines the growth of government expenditures in Canadian provinces. Data spanning the past three decades are used to explain the growth of provincial government expenditures in Canada and to test alternative hypotheses. From a basic general theoretical model, three empirical models are developed and tested. It is concluded that the growth of the private sector share of the Provincial Gross Domestic Product (PGDP), capacity utilization and factors such as federal transfer payments to the provincial governments best explain the growth in expenditure at the provincial level. The expenditure policies of provincial governments are found to be independent of the political stance of the political parties in power. Estimated short-run and long-run ‘income’ elasticities of provincial government expenditures with respect to PGDP reveal that government expenditures have grown in proportion to PGDP. The growth of provincial spending over the last three decades has been stimulated by the demand for services (such as education and health) and by federal transfer payment programmes through their combined income and substitution effects.     

Out-of-pocket health care expenditure in Turkey: Analysis of the 2003–2008 Household Budget Surveys

This paper analyses the prevalence of ‘catastrophic’ out-of-pocket health expenditure in Turkey and identifies the factors which are associated with its risk using the Turkish Household Budget Surveys from 2003 to 2008. A sample selection approach based on Sartori (2003) is adopted to allow for the potential selection problem which may arise if poor households choose not to seek health care due to concerns regarding its affordability. The results suggest that poor households are less likely to seek health care as compared to non-poor households and that a negative relationship between poverty and experiencing catastrophic health expenditure remains even after allowing for such selection bias. Our findings, which may assist policy-makers concerned with health care system reforms, also highlight factors such as insurance coverage, which may protect households from the risk of incurring catastrophic health expenditure.     

The income effect and supplier induced demand. Evidence from primary physician services in Norway

A much debated issue within the health economic literature is whether physicians can induce demand for their services. The relationship between physicians' ‘nonpractice income’ and supply of primary physician services in Norway is examined. It is argued that, if inducement exists, physicians with a low nonpractice income who work in municipalities where competition for patients is high, compensate for lack of patients by inducing demand. This model is adapted to the institutional setting of the Norwegian primary physician services, where there is a fixed fee schedule. The analyses were performed on a large set of data, encompassing all primary care physicians in Norway who are remunerated per item of treatment. Data on output in practice were merged with information about nonpractice income from the tax forms of the physician and her/his spouse. In municipalities with high physician density, nonpractice income had no effect on the number of consultations per physician, or on the number of treatment items per consultation. The results are interpreted as evidence against the inducement hypothesis.     

Geographical variations in expenditure of learning disability services in England

This article investigates the determinants of local authority Learning Disability (LD) expenditure in England. It adopts a reduced form of demand and supply model, extended to account for possible interdependence between municipalities. Risk factors such as ‘people aged under 14’, ‘mortality rate’ and ‘lone parents’ seem to play an important role in explaining geographical variation of spending. Further, labour municipalities on average allocate lower resources on LD than do other political parties. Finally, results corroborate recent findings in economics that authorities interact with each other when allocating public resources.     

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.     

On the relationship between GDP and health care expenditure: A new look

In this paper we analyze the relationship between income and health expenditure in 31 Organization for Economic Cooperation and Development (OECD) countries. We focus on the differences between short and long term elasticities and we also check the adjustment process of health care expenditure to changes in per capita Gross Domestic Product (GDP) and its cyclical and trend components. In both cases, we test if results differ in countries with a higher share of private expenditure on total health expenditure. Econometric results show that the long-run income elasticity is close to unity, that health expenditure is more sensitive to per capita income cyclical movements than to trend movements, and that the adjustment to income changes in those countries with a higher share of private health expenditure over total expenditure is faster.     

新型农村社会养老保险政策效果评估——收入、贫困、消费、主观福利和劳动供给

本文使用中国健康与养老追踪调查(CHARLS)数据,采用断点回归和双重差分识别策略,估计了"新农保"对农村老年人收入、贫困、消费、主观福利和劳动供给的影响。研究结果显示,"新农保"养老金收入显著提高了农村老年人的收入水平、减少了贫困的发生、提高了其主观福利,并在一定程度上促进了家庭消费和减少了老年人劳动供给。进一步的研究显示,健康状况较差的老年人受到的政策影响更大更显著,表明"新农保"的政策影响存在异质性。     

Medical Expenditures and Health Status in Australia: A Story of Increasing or Decreasing Returns?

We use a three‐equation model to estimate a health production function for Australia using population data for 1996. Working at the level of the Statistical Local Area (n= 1335) we match (i) data on private practice medical services (derived from the Medicare scheme), (ii) mortality data derived from the de‐identified unit records produced by the Australian Bureau of Statistics (ABS), and (Hi) social and economic data from the Australian Census of Population and Housing (ABS 1997). We detect strong and statistically significant positive marginal effects of medical expenditure on health status as well as increasing returns. These findings are remarkably different from those of US health production studies, which have tended to lend support to the hypothesis of ‘flat‐of‐the‐curve (that is, zero marginal product) medicine’. Moreover, our conclusions are in stark contrast to those produced by Richardson and Peacock (2003, p. 6), who have argued that their econometric work indicates that ‘an increase in the [Australian] doctor supply is associated with increasing mortality’.     

Aggregate health care expenditure in the United States: evidence from cointegration tests

Unlike recent studies that are based on international cross-sectional series, this paper attempts to quantify the role of the determinants of aggregate health care expenditure per capita, using time-series data for the period of 1960–87 for the United States. The paper applies the relatively new procedures of unit root testing, cointegration and error-correction modelling. The evidence supports cointegration. Although, the results indicate that per capita income, age of the population, number of practising physicians, and public financing of health care are important determinants, the age structure of the population and number of practising physicians emerge as the major determinants of aggregate health care expenditure in the United States.     

我国健康保险有效需求的实证分析

有效保险需求是在当前特定时期内,在一定保险价格、一定购买力条件下现实的保险需求,是保险公司真正面对的业务来源。本文使用最近几年健康保险保费收入、城镇居民可支配收入、城镇基本医疗保险基金总收入及居民医疗保健支出等数据,通过建立回归模型对健康保险有效需求进行分析。结果显示：居民购买力和医疗费用的增长对我国健康保险的有效需求有显著影响,社会保险并未对商业健康保险产生替代作用,相反与健康保险保费收入同向增长。     

The cyclical response of employment to output changes: United States manufacturing industries, 1948 to 1983

This paper provides new evidence on the income elasticity of health care by combining stationarity and cointegration tests of health care expenditure and incomes with estimates of the cointegrating relationship between them. A recently updated dataset of health care expenditures and disposable personal income for the US states for the years 1966–1998 is used. The principal findings are that health care expenditures and incomes at the state level are non-stationary and cointegrated. Dynamic OLS cointegrating regressions of the pooled state time series estimate the income elasticity of health care at 0.817 to 0.844, well below unity, confirming that health care expenditure, even at the aggregate level, is a necessity good.     

Robust determinants of health care expenditure growth

Our aim is to disclose robust explanatory variables for health care expenditure (HCE) growth by introducing to this field of research a method that is especially well suited for situations of ‘model uncertainty’: the Extreme Bounds Analysis (EBA). We analyse data for 33 OECD countries over the period 1970–2010 and include – as far as it is statistically feasible – all macroeconomic and institutional determinants of HCE growth in the EBA that have been suggested in the literature. Furthermore, we analyse to what extent outliers in the data influence the results. Our results confirm earlier findings that GDP growth and a variable representing Baumol’s ‘cost disease’ theory emerge as robust and statistically significant determinants of HCE growth. Depending on whether or not outliers are excluded, we find up to six additional robust drivers: the growth in expenditure on health administration, the change in the share of inpatient expenditure in total health expenditure, the (lagged) government share in GDP, the change in the insurance coverage ratio, the growth in land traffic fatalities and the growth in the population share undergoing renal dialysis.     

The determinants of health care expenditure in Australia

The objective of this article is to examine the long-run relationship and short-run dynamics of the health care expenditure in Australia during the period 1960–2003. Consistent with the conventional findings, the income elasticity for health care is found to be greater than one, suggesting that health care is a luxury good in Australia. Demographic structure is found to exert a significant positive impact on health care expenditure. An increase in the accessibility to health care services is associated with higher per capita real health care expenditure. Finally, public funding of health care appears to have a contributory effect on the formation of health care expenditure in Australia.     

The theory of household behaviour under rationing

This paper simplifies and extends the theory of household behaviour under rationing, using duality and the concept of ‘virtual’ prices. Slutsky-type equations, decomposing the derivatives of the rationed demand functions into income and substitution effects, are derived, and these derivatives are related to the corresponding derivatives of the unrationed demand functions for finite as well as infinitesimal ration levels. The results imply that the Keynesian demand multiplier is more likely but the Barro Grossman supply multiplier is less likely to exceed unity the further the household is from its unconstrained equilibrium.