Title: Examining the heterogeneous effect of healthcare expenditure determinants

Authors: Tiffany Hui-Kuang Yu, David Han-Min Wang, Li-Ying Chang

Addresses: Department of Public Finance, Feng Chia University, 100 Wenhwa Road, Taichung, 40724, Taiwan. ' Department of Accounting, Feng Chia University, 100 Wenhwa Road, Taichung, 40724, Taiwan. ' Department of Public Finance, Feng Chia University, 100 Wenhwa Road, Taichung, 40724, Taiwan

Abstract: To shed light on the issue of the black box of healthcare expenditure growth determinants, this study performs quantile regression analysis on examining the heterogeneous effect of healthcare expenditure determinants in Taiwan and the OECD countries. A total of 25 countries are studied over a period from 1992 to 2007. The results show that income, elderly populations, and number of physicians have significant positive effects on long-term healthcare expenditures. The income elasticity of healthcare expenditure lies between 1.20 and 1.47, which indicates that healthcare is a luxury good. And, income elasticity increases in higher quantiles of healthcare expenditures. However, the effects of elderly populations and number of physicians are decreasing towards the higher quantiles of healthcare expenditures.

Keywords: healthcare expenditure; quantile regression; income elasticity; expenditure determinants; heterogeneous effects; growth determinants; expenditure growth; regression analysis; Taiwan; OECD; Organisation for Economic Co-operation and Development; elderly populations; physician numbers; doctors; long-term expenditure; behavioural research; healthcare research.

DOI: 10.1504/IJBHR.2011.041044

International Journal of Behavioural and Healthcare Research, 2011 Vol.2 No.3, pp.205 - 213

Published online: 30 Jun 2011 *

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