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Are Health Care Expenditures and Personal Disposable Income Characterised by Asymmetric Behaviour? Evidence from US State-Level Data

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Abstract

This paper examines the asymmetry (steepness and deepness asymmetry) in per capita health care expenditure and disposable income series in the 50 US states over the period 1966–2009, using the nonparametric Triples test techniques, together with the parametric Fisher–Pearson skewness test. The results suggest significant evidence of asymmetric behaviour (mainly, steepness asymmetry) in many of these series, questioning, thus, the adequacy of linear models when modelling the behaviour of these two series.

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Notes

  1. Ramsey and Rothman (1996) classify asymmetry into longitudinal and transversal. They defined longitudinal asymmetry as asymmetry in the direction of the movement of the business cycle. In a similar manner, they defined transversal asymmetry as asymmetry orthogonal to the direction of the movement of the business cycle. Steepness would be a longitudinal asymmetry while deepness would be an example of transversal asymmetry.

  2. We would like to thank Donald G. Freeman, Sam Houston State University, for providing the dataset.

  3. All computations were done using the publicly available MATLAB codes written by Jos van der Geest.

  4. Although the results of the triples test depend on the filter used to de-trend the series, a robust result obtained when applying both the HP and BK filters is that the evidence of deepness asymmetry is significantly weaker than the evidence of steepness asymmetry.

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Acknowledgments

Juncal Cuñado gratefully acknowledges financial support from the Ministerio de Economía y Competitividad (ECO2014-55496).

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Authors and Affiliations

  1. Tshwane University of Technology, Pretoria, South Africa

    Mulatu F. Zerihun

  2. School of Economics, University of Navarra, Edificio Amigos, 31080, Pamplona, Spain

    Juncal Cunado

  3. University of Pretoria, Pretoria, South Africa

    Rangan Gupta

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  1. Mulatu F. Zerihun
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  2. Juncal Cunado
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  3. Rangan Gupta
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Correspondence to Juncal Cunado.

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Zerihun, M.F., Cunado, J. & Gupta, R. Are Health Care Expenditures and Personal Disposable Income Characterised by Asymmetric Behaviour? Evidence from US State-Level Data. Soc Indic Res 131, 527–542 (2017). https://doi.org/10.1007/s11205-016-1275-8

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  • DOI: https://doi.org/10.1007/s11205-016-1275-8

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