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Is health care a necessary or luxury product for Asian countries? An answer using panel approach

Author

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  • S. M. Abdullah

    (University of Dhaka)

  • Salina Siddiqua

    (University of Dhaka)

  • Rumana Huque

    (University of Dhaka)

Abstract

A number of studies have estimated the income elasticity of health care expenditure to identify whether health care is a necessary or luxury product. However, the issue has received less attention in developing countries, especially in Asian economies. The current study for the first time has used the panel data covering 36 Asian countries for the period 1995–2013 for revealing the nature of health care as a product. Along with conventional econometric techniques we have addressed the issue of cross section dependence and used Westerlund (2007) panel cointegration test which is robust against cross section dependence and heterogeneity for detecting the presence of panel cointegration. By applying Fully Modified OLS (FMOLS) and Dynamic OLS (DOLS) it was found that the long run elasticity of Health Care Expenditure (HCE) with Gross Domestic Product (GDP) is less than unit implying that the health care can be regarded as necessary in nature for these countries.

Suggested Citation

  • S. M. Abdullah & Salina Siddiqua & Rumana Huque, 2017. "Is health care a necessary or luxury product for Asian countries? An answer using panel approach," Health Economics Review, Springer, vol. 7(1), pages 1-12, December.
    • Handle: RePEc:spr:hecrev:v:7:y:2017:i:1:d:10.1186_s13561-017-0144-8
    DOI: 10.1186/s13561-017-0144-8
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    7. Mirza, Faisal Mehmood & Sinha, Avik & Khan, Javeria Rehman & Kalugina, Olga A. & Zafar, Muhammad Wasif, 2022. "Impact of Energy Efficiency on CO2 Emissions: Empirical Evidence from Developing Countries," MPRA Paper 111923, University Library of Munich, Germany, revised 2022.
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    10. Samia Nasreen, 2021. "Association between health expenditures, economic growth and environmental pollution: Long‐run and causality analysis from Asian economies," International Journal of Health Planning and Management, Wiley Blackwell, vol. 36(3), pages 925-944, May.
    11. Muhammad Arshad Khan & Muhammad Iftikhar Ul Husnain, 2019. "Is health care a luxury or necessity good? Evidence from Asian countries," International Journal of Health Economics and Management, Springer, vol. 19(2), pages 213-233, June.
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    13. Azad, Abul Kalam & Abdullah, S M & Fariha, Tasnim Rahman, 2017. "Does Carbon Emission Matter for Health Care Expenditure? Evidence from SAARC region using Panel Cointegration," MPRA Paper 121152, University Library of Munich, Germany.
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    More about this item

    Keywords

    Income elasticity; Health care expenditure; Panel cointegration; Panel unit root; Cross section dependence; FMOLS; DOLS;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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