Biases in the healthcare luxury good hypothesis?: a meta-regression analysis
Although a growing literature examining the relationship between income and health expenditures suggests that healthcare is a luxury good, this conclusion is debatable owing to heterogeneity of the existing results. The paper tests the luxury good hypothesis (namely that income elasticity exceeds 1) by using meta-regression analysis, taking into consideration publication selection and aggregation bias. The findings suggest that publication bias exists, which is a result that is robust to the meta-regression model employed. Publication selection and aggregation bias also appear to play a role in the generation of estimates. The corrected estimates of income elasticity range from 0.4 to 0.8, which cast serious doubt on the validity of the luxury good hypothesis.
Document Type: Research Article
Publication date: 2011-01-01