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Is income relevant for health expenditure and economic growth nexus?

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Abstract

This paper examines the relationship between health expenditure and economic growth using panel data consisting low and high-income countries. Using dynamic panel data methodology, we analyze twenty five high-income and nineteen low-income economies for the periods of 1995–2012 and 1997–2009, respectively. We find reciprocal relationship between health expenditure and economic growth in the short run and one-way causality from economic growth to public health expenditure in the long-run. In high-income countries, there is a two-way causality for both private and public health expenditures in the short-run, while in the long-run there is a one-way causality between economic growth and private health expenditures. The crucial finding of this study is that private health expenditures have negative influence on economic growth while public health expenditures have both negative and statistically significant effect.

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Notes

  1. e.g. life expectancy, mortality rate, adult survival rates, fertility rate, stature at adulthood, access to safe water, average birth rate, average death rate, infant mortality rate, undernourishment or malnutrition, health satisfaction proxies, investment in health, investment on medical facilities growth rates, pharmaceuticals growth, alcohol consumption, average height of adult men, the number of doctors, medical beds, pharmaceutical expenditure, calorie intake and health expenditure (public and/or private and/or total).

  2. See, for example, Amiri and Ventelou (2012), Apergis and Padhi (2013), Baltagi and Moscone (2010), Berger and Messer (2002), Blomqvist and Carter (1997), Chakroun (2010), Devlin and Hansen (2001), Eggoh et al. (2015), Erdil and Yetkiner (2009), Farag et al. (2012), Gerdtham and Löthgren (2000), Hansen and King (1996), Hartwig (2010), Hassan and Kalim (2012), Hassan and Kalim (2012), Heshmati (2001), Jaunky and Khadaroo (2008), Kiymaz et al. (2006), Lago-Peñas et al. (2013), Narayan et al. (2010), Pradhan (2010), Rivera and Currais (1999), Rivera and Currais (1999a), Rivera and Currais (2003), Rivera and Currais (2004), Sen (2005), Sülkü and Caner (2011), Wang (2011), Wang and Rettenmaier (2007).

  3. See, for related results, Blomqvist and Carter (1997), Devlin and Hansen (2001), Devlin and Hansen (2001), Eggoh et al. (2015), Erdil and Yetkiner (2009), Gerdtham and Löthgren (2000). Hansen and King (1996), Wang (2011).

  4. See, for related results, Amiri and Ventelou (2012), Apergis and Padhi (2013), Baltagi and Moscone (2010), Beraldo et al. (2005), Berger and Messer (2002), Chakroun (2010), Dritsakis (2005), Hassan and Kalim (2012), Heshmati (2001), Jaunky and Khadaroo (2008), Kiymaz et al. (2006), Murthy and Ukpolo (1994), Narayan et al. (2010), Tang (2009), Wang and Rettenmaier (2007).

  5. See, for related empirical literature, Arora (2001), Dritsakis (2005), Gerdtham and Löthgren (2000), Granados (2012), Hansen and King (1996), Hassan and Kalim (2012), Jaunky and Khadaroo (2008), Kiymaz et al. (2006), Maitra and Mukhopadhyay (2012), Murthy and Ukpolo (1994), Narayan et al. (2010), Pradhan (2010), Sülkü and Caner (2011), Swift (2010), Swift (2011), Tang (2009) and Wang and Rettenmaier (2007).

  6. See Granados (2012), Hansen and King (1996), Maitra and Mukhopadhyay (2012) and Murthy and Ukpolo (1994).

  7. See Amiri and Ventelou (2012), Chen et al. (2014b), Hassan and Kalim (2012), Pradhan (2010) and Swift (2011).

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Authors and Affiliations

  1. Faculty of Economics and Administrative Sciences, Melikşah University, Kayseri, Turkey

    Nadide Sevil Halıcı-Tülüce

  2. Faculty of Economics and Administrative Sciences, Bozok University, Yozgat, Turkey

    İbrahim Doğan

  3. Faculty of Economics and Administrative Sciences, Erciyes University, Kayseri, Turkey

    Cüneyt Dumrul

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  1. Nadide Sevil Halıcı-Tülüce
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Correspondence to Cüneyt Dumrul.

Appendices

Appendix 1

See Table 7.

Table 7 The selected empirical papers related to health-growth relationship
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Appendix 2

See Table 8.

Table 8 Low and high-income countries
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Halıcı-Tülüce, N.S., Doğan, İ. & Dumrul, C. Is income relevant for health expenditure and economic growth nexus?. Int J Health Econ Manag. 16, 23–49 (2016). https://doi.org/10.1007/s10754-015-9179-8

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