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The Granger-causality between health care expenditure and output: a panel data approach

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Abstract:

This study investigates the Granger-causality relationship between real per capita GDP and real per capita health care expenditure by employing a large macro panel data set with a VAR representation. The findings verify that the dominant type of Granger-causality is bidirectional. In instances that we found one-way causality, the pattern is not homogenous: Our analyses show that one-way causality generally runs from income to health in low- and middle-income countries whereas the reverse holds for high-income countries. Accordingly, care must be paid in defining the dependent and independent variables when specifying the determinants of health care expenditure.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840601019083

Affiliations: 1: Department of Economics, Middle East Technical University, 06531 Ankara, Turkey 2: Department of Economics, Izmir University of Economics, Izmir, Turkey

Publication date: February 1, 2009

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