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Determinants of Thailand household healthcare expenditure: the relevance of permanent resources and other correlates

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  • Albert A. Okunade
  • Chutima Suraratdecha
  • David A. Benson

Abstract

Several papers in the leading health economics journals modeled the determinants of healthcare expenditure using household survey or family budgets data of developed countries. Past work largely used self‐reported current income as the core determinant, whereas the theoretically correct concept of household resource constraint is permanent or long‐run income (á lá Milton Friedman). This paper strives to rectify the theoretical oversight of using current income by augmenting the model with household asset. Using longitudinal data, we constructed ‘wealth index’ as a distinct covariate to capture the households' tendency to liquidate assets when defraying necessary healthcare liabilities after exhausting cash incomes. (Current income and assets together capture the household expanded resource base). Using 98 632 household observations from Thailand Socio‐Economic Surveys (1994–2000 biennial data cycles) we found, using a double‐hurdle model with dependent errors, that out‐of‐pocket healthcare spending behaves as a technical necessity across income quintiles and household sizes. Pre‐1997 economic shock income elasticities are smaller than the post‐shock estimates across income quintiles for large and small households. Proximity to death, median age, and assets are also among other significant determinants. Our novel findings extend the theoretical consistency of a multi‐level decision model in household healthcare expenditure in the developing Asian country context. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Albert A. Okunade & Chutima Suraratdecha & David A. Benson, 2010. "Determinants of Thailand household healthcare expenditure: the relevance of permanent resources and other correlates," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 365-376, March.
  • Handle: RePEc:wly:hlthec:v:19:y:2010:i:3:p:365-376
    DOI: 10.1002/hec.1471
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    1. Kyriopoulos, Ilias & Nikoloski, Zlatko & Mossialos, Elias, 2019. "The impact of the Greek economic adjustment programme on household health expenditure," Social Science & Medicine, Elsevier, vol. 222(C), pages 274-284.
    2. Osmani, Ahmad Reshad & Okunade, Albert, 2021. "A Double-Hurdle Model of Healthcare Expenditures across Income Quintiles and Family Size: New Insights from a household Survey," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 14(6), pages 246-246.
    3. Qun Wang & Alex Z Fu & Stephan Brenner & Olivier Kalmus & Hastings Thomas Banda & Manuela De Allegri, 2015. "Out-of-Pocket Expenditure on Chronic Non-Communicable Diseases in Sub-Saharan Africa: The Case of Rural Malawi," PLOS ONE, Public Library of Science, vol. 10(1), pages 1-15, January.
    4. Dubey, Jay Dev, 2020. "Income elasticity of demand for health care and it's change over time: Across the income groups and levels of health expenditure in India," Working Papers 20/324, National Institute of Public Finance and Policy.
    5. Ayşenur Demir & Ömer Alkan & Abdulbaki Bilgiç & Wojciech J. Florkowski & Abdulkerim Karaaslan, 2022. "Determinants of Turkish households' out‐of‐pocket expenditures on three categories of health care services: A multivariate probit approach," International Journal of Health Planning and Management, Wiley Blackwell, vol. 37(4), pages 2303-2327, July.
    6. Zikidou, Stavroula & Hadjidema, Stamatina, 2020. "Household Health Expenditure in Greece and the Impact of Financial Crisis," MPRA Paper 99388, University Library of Munich, Germany.
    7. White-Means, Shelley I. & Osmani, Ahmad Reshad, 2019. "Job Market Prospects of Breast vs. Prostate Cancer Survivors in the US: A Double Hurdle Model of Ethnic Disparities," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 40, pages 282-304.
    8. Axel Demenet, 2016. "Health Shocks and Permanent Income Loss: the Household Business Channel," Working Papers DT/2016/11, DIAL (Développement, Institutions et Mondialisation).
    9. Gregory G. Lubiani & Albert A. Okunade & Weiwei Chen, 2018. "Income Elasticity Decomposition Models and Determinants of U.S. Pharmaceutical Expenditures," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(4), pages 389-403, December.
    10. Jay Dev Dubey, 2021. "Measuring Income Elasticity of Healthcare-Seeking Behavior in India: A Conditional Quantile Regression Approach," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 19(4), pages 767-793, December.
    11. Mohammad Hajizadeh & Hong Nghiem, 2011. "Out-of-pocket expenditures for hospital care in Iran: who is at risk of incurring catastrophic payments?," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 267-285, December.
    12. Phanindra V. Wunnava & Albert A. Okunade, 2013. "Do Business Executives Give More to Their Alma Mater? Longitudinal Evidence from a Large University," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(3), pages 761-778, July.
    13. Junious M Sichali & Jahangir A K Khan & Elvis M Gama & Hastings T Banda & Ireen Namakhoma & Grace Bongololo & Rachael Thomson & Berthe Stenberg & S Bertel Squire, 2019. "Direct costs of illness of patients with chronic cough in rural Malawi—Experiences from Dowa and Ntchisi districts," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-12, December.

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