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The Relationship between Health Care Expenditures and Income in the Selected Transition Economies: A Panel Smooth Transition Regression Analysis

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  • Mahmut ZORTUK

    (Dumlupınar University, FEAS, Department of Econometrics, Kutahya / Turkey.)

  • Sinan ÇEKEN

    (Dumlupınar University, FEAS, Department of Econometrics, Kutahya / Turkey)

Abstract

The relationship between health care expenditure and income of transition economies which are members of the European Union are evaluated for the 1995 – 2011 period by Panel Smooth Transition Regression Model. In the study, a second model is established in order to evaluate the effect of age structure, which is an important factor in explaining changes in health care expenditures, by adding the ratio of population under 15 and the ratio of population over 65. In addition, the lagged value of the ratio of public expenditures on health care is added to the model. As a result of the study, there is only one relatively sharp transition observed if income and time are considered as explanatory variables in the related period, but actually by adding age structure variables this transition shows two rather smoother transition structures.

Suggested Citation

  • Mahmut ZORTUK & Sinan ÇEKEN, 2015. "The Relationship between Health Care Expenditures and Income in the Selected Transition Economies: A Panel Smooth Transition Regression Analysis," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 105-118, June.
    • Handle: RePEc:rjr:romjef:v::y:2015:i:2:p:105-118
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    More about this item

    Keywords

    extreme regimes; non-linear models; European Union; income elasticity; public expenditures on health;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General

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