Skip to main content

The determinants of health expenditures: evidence from US state-level data

Buy Article:

$53.17 plus tax (Refund Policy)


Most macro studies of what determines health expenditures have used the same panel of OECD country-level data. Based on a more homogeneous panel data set of US states we constructed, this note applies the model selection procedure to identify the determinants of health expenditures at the state level. We find that the four key factors are gross state products, the proportion of the population over the age of 65, the degree of urbanization and the number of hospital beds. The cross-section income elasticity of health care is around 0.7, implying that health care is a necessity rather than a luxury good at the state level. The (relative) price of health care varies significantly across states but does not appear to have real effects on the amount of resources (measured in real dollars) a state devotes to health care.

Document Type: Research Article


Affiliations: Private Enterprise Research Center, Texas A & M University, 77843 United States

Publication date: February 1, 2009

More about this publication?

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Partial Open Access Content
Partial Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more