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Efficiency of health expenditure in the OECD and LAC: a data envelopment analysis

Author

Listed:
  • Daysi Sanmartín-Durango

    (Universidad de Antioquia)

  • Maria Alejandra Henao-Bedoya

    (Tuya Compañía de Financiamiento)

  • Yair Tadeo Valencia-Estupiñan

    (Grupo Bancolombia)

  • Jairo Humberto Restrepo-Zea

    (Universidad de Antioquia)

Abstract

This paper measures the efficiency of expenditure in health care in 62 countries of Latin America and the Caribbean (LAC) and the Organization for Economic Co-operation and Development (OECD), based on the ratio between the level of total expenditure (as percent of GDP) and some health results (life expectancy and mortality rates in children under five years of age per every 1000 children born alive). For this purpose, the non-parametric method data envelopment analysis was applied using data from 1995, 2005 and 2014 for each group. The results allow identifying the relative efficiency and position of the set of countries analysed within both groups of countries. In 2014, the most efficient countries in LAC were Chile, Cuba, Dominican Republic, Venezuela and Jamaica, whilst in the OECD these were Japan, Luxembourg and Turkey. The average efficiency of LAC countries turns out to be below that of the OECD (0.938 and 0.974, respectively)

Suggested Citation

  • Daysi Sanmartín-Durango & Maria Alejandra Henao-Bedoya & Yair Tadeo Valencia-Estupiñan & Jairo Humberto Restrepo-Zea, 2019. "Efficiency of health expenditure in the OECD and LAC: a data envelopment analysis," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 91, pages 41-78, Julio - D.
    • Handle: RePEc:lde:journl:y:2019:i:91:p:41-78
    DOI: 10.17533/udea.le.n91a02
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    References listed on IDEAS

    as
    1. Berta Rivera, 2001. "The effects of public health spending on self-assessed health status: an ordered probit model," Applied Economics, Taylor & Francis Journals, vol. 33(10), pages 1313-1319.
    2. Joe Zhu, 2014. "Data Envelopment Analysis," International Series in Operations Research & Management Science, in: Quantitative Models for Performance Evaluation and Benchmarking, edition 3, chapter 1, pages 1-9, Springer.
    3. Lago, Fernando Pablo & Geri, Milva & Moscoso, Nebel Silvana & Monterubbianes, Pablo Daniel, 2022. "Gasto Total En Salud Y Resultados," Revista de Ciencias Económicas, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica, vol. 31(2), July.
    4. Cook, Wade D. & Tone, Kaoru & Zhu, Joe, 2014. "Data envelopment analysis: Prior to choosing a model," Omega, Elsevier, vol. 44(C), pages 1-4.
    5. Yong-bae Ji & Choonjoo Lee, 2010. "Data envelopment analysis," Stata Journal, StataCorp LP, vol. 10(2), pages 267-280, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    health expenditure; efficiency; data envelopment analysis; Latin America and the Caribbean; Organization for Economic Cooperation and Development;
    All these keywords.

    JEL classification:

    • I19 - Health, Education, and Welfare - - Health - - - Other
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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