Health Care Expenditure and GDP: An African Perspective

16 Pages Posted: 2 Dec 2008

Multiple version iconThere are 2 versions of this paper

Date Written: November 27, 2008

Abstract

This paper sheds light on the income elasticity of health care expenditure in Africa. The existing literature has to date focused on developed countries due to scarcity of health expenditure data in developing countries. We herein exploit panel data techniques, combining time-series and cross-section data, which enable a substantial increase in testing power. Income elasticity of health care expenditure for 28 African countries over the decade 1991-2000 is investigated. In addition to aggregate health expenditure, we model public and private health expenditures separately. In both the short-run and long-run, public health expenditure is found to be a luxury while private health expenditure a necessity. This is not too surprising in the context of Africa, where the public sector has to strive hard to provide basic health care to the poor majority but where a rich minority can easily afford hi-tech private health care. Furthermore the income elasticity of public health expenditure is found to be pro-cyclical while that of private health expenditure is counter-cyclical, thereby reinforcing our previous finding.

Keywords: Health care expenditure, panel cointegration, Africa

JEL Classification: C23, I10

Suggested Citation

Jaunky, Vishal C. and Khadaroo, Ahmad Jameel, Health Care Expenditure and GDP: An African Perspective (November 27, 2008). Applied Econometrics and International Development, Vol. 8, No. 1, 2008. Available at SSRN: https://ssrn.com/abstract=1308257

Vishal C. Jaunky (Contact Author)

University of Mauritius ( email )

Reduit, 80837
Mauritius

Ahmad Jameel Khadaroo

University of Mauritius ( email )

Reduit, 80837
Mauritius

Register to save articles to
your library

Register

Paper statistics

Downloads
84
rank
72,806
Abstract Views
868
PlumX Metrics