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How Aging Population Affects Health Care Expenditures in Pakistan? A Bayesian VAR Analysis

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Abstract

The changing population structure has raised serious concerns about future health care expenditures in Pakistan. Growing proportion of aged people could lead to a higher health care expenditure as occurrence of chronic-degenerative diseases increases and a large demand for health and social care is visualized with a subsequent effect on health expenditures. Considering the above research problem, the current study analyzed the effects of ageing population on health care expenditures in Pakistan using a time-series data from period 1995 to 2014. Bayesian VAR approach was applied to evaluate the impacts of population ageing on health care expenditures. From the results of the study it was clear that health expenditure of Pakistan showed more response towards aged population as compared to life expectancy and per capita GDP. Population aging brought about 2.6 percent increase in health care expenditures and are expected to rise to 17.2 percent in tenth year when compared to the base year. Life expectancy also brought an increase in healthcare expenditure; bringing about 3.6 percent increase in health care expenditures per capita and 14.2 percent increase in tenth year. Real GDP per capita explains 1.7 percent fluctuation in health care expenditures per capita in third year which increases to 3 percent in tenth year. A macro level dedicated health policy for elderly people could help to minimize the health care expenditures such as, training of primary care doctors in geriatrics and provision of domiciliary care. Ageing population illnesses that give hike to health care expenditure should be considered for further research to get more truthful outcomes.

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Notes

  1. Ageing index is a ratio calculated as; \(\frac{\%\,of\,population\,aged\,60\,and\,above}{{\%\,of\,population\,under\,age\,15 }} \times 100\) Bharathi (2014).

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Author information

Authors and Affiliations

  1. Department of Economics, COMSATS University, Islamabad, Pakistan

    Usman Shakoor, Mudassar Rashid, Ashfaque Ali Baloch & Muhammad Iftikhar ul Husnain

  2. Department of Economics, Arid Agriculture University Rawalpindi, Pir Meher Ali Shah, Rawalpindi, Pakistan

    Abdul Saboor

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  1. Usman Shakoor
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Appendix 1

Appendix 1

 Standard errors in ( )

 

LLE

LHCEP

LRGPC

LINDEX

Vector Autoregression Estimates

LLE(− 1)

 2.006026

− 119.8566

− 51.77769

 0.922739

 (0.15189)

 (133.456)

 (16.0265)

 (4.21477)

LLE(− 2)

− 1.046094

 103.3289

 48.35531

− 0.660584

 (0.14343)

 (126.020)

 (15.1336)

 (3.97994)

LHCEP(− 1)

 0.000154

 0.343984

 0.043767

− 0.000305

 (0.00030)

 (0.26371)

 (0.03167)

 (0.00833)

LHCEP(− 2)

− 3.05E−05

− 0.812693

 0.000821

− 0.002474

 (0.00034)

 (0.30152)

 (0.03621)

 (0.00952)

LRGPC(− 1)

 0.000215

 2.567470

 0.419229

− 0.017564

 (0.00264)

 (2.31836)

 (0.27841)

 (0.07322)

LRGPC(− 2)

 0.003120

 1.008714

− 0.351844

− 0.003311

 (0.00221)

 (1.93952)

 (0.23291)

 (0.06125)

LINDEX(− 1)

 0.027973

− 16.24773

− 0.244232

 1.901545

 (0.00831)

 (7.30473)

 (0.87721)

 (0.23070)

LINDEX(− 2)

− 0.023890

 20.64165

 1.754412

− 0.937792

 (0.00991)

 (8.70871)

 (1.04581)

 (0.27504)

C

 0.132916

 38.98987

 17.07949

− 0.852950

 (0.07459)

 (65.5332)

 (7.86977)

 (2.06965)

 R-squared

 0.999992

 0.979967

 0.996777

 0.999732

 Adj. R-squared

 0.999984

 0.962160

 0.993912

 0.999495

 Sum sq. resids

 5.92E-08

 0.045700

 0.000659

 4.56E-05

 S.E. equation

 8.11E-05

 0.071259

 0.008557

 0.002250

 F-statistic

 132759.5

 55.03205

 347.9146

 4204.400

 Log likelihood

 150.2534

 28.24336

 66.39486

 90.43655

 Akaike AIC

− 15.69483

− 2.138151

− 6.377207

− 9.048505

 Schwarz SC

− 15.24964

− 1.692965

− 5.932021

− 8.603319

 Mean dependent

 4.159491

 3.134118

 6.861569

 2.412313

 S.D. dependent

 0.020272

 0.366319

 0.109672

 0.100116

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Shakoor, U., Rashid, M., Baloch, A.A. et al. How Aging Population Affects Health Care Expenditures in Pakistan? A Bayesian VAR Analysis. Soc Indic Res 153, 585–607 (2021). https://doi.org/10.1007/s11205-020-02500-x

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