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Determinants of Public Expenditure on Health in India: A Panel Data Analysis at Sub-National Level

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  • Shailender Kumar Hooda

    (Institute for Studies in Industrial Development (ISID))

Abstract

This study explores whether political factors and fiscal capacity matter more in explaining the growth and variation in health expenditure than the state’s income in India. The findings suggest that with the widening of political participation and greater representation of diverse population groups in politics, one can see a concomitant rise in government expenditure on health, indicating state interventionism in health sector for political reasons. Government’s desire to increase health spending depends on the availability of financial resources with the states, failing which the probability of fulfilling expenditure obligations towards the sector would be low. In contrast to earlier estimates that income elasticity of health expenditure is nearly equal to or greater than one, the elasticity is found to be less than one which ranges between 0.16 and 0.59. Overall, coefficient estimates of most of these important covariates show an upward bias in terms of magnitude and precision due to the absence of unobserved control factors and of advanced robust estimation techniques.

Suggested Citation

  • Shailender Kumar Hooda, 2016. "Determinants of Public Expenditure on Health in India: A Panel Data Analysis at Sub-National Level," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 14(2), pages 257-282, December.
    • Handle: RePEc:spr:jqecon:v:14:y:2016:i:2:d:10.1007_s40953-016-0033-8
    DOI: 10.1007/s40953-016-0033-8
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    Cited by:

    1. Datta, Sandip, 2020. "Political competition and public healthcare expenditure: Evidence from Indian states," Social Science & Medicine, Elsevier, vol. 244(C).
    2. Issa Dianda & Idrissa Ouedraogo & Jean de dieu Goumbri, 2021. "Closing the Gender Gap in Secondary School Enrolment in sub-Saharan Africa: Does women's political empowerment matter?," Economics Bulletin, AccessEcon, vol. 41(2), pages 544-552.
    3. 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.
    4. Tamisai Chipunza & Senia Nhamo, 2023. "Fiscal capacity and public health expenditure in Zimbabwe," Cogent Economics & Finance, Taylor & Francis Journals, vol. 11(1), pages 2175459-217, December.
    5. Issa Dianda & Idrissa Ouedraogo & Jean de Dieu Goumbri, 2021. "Closing the Gender Gap in Secondary School Enrolment in sub-Saharan Africa: Does women’s political empowerment matter?," Working Papers of The Association for Promoting Women in Research and Development in Africa (ASPROWORDA). 21/011, The Association for Promoting Women in Research and Development in Africa (ASPROWORDA).
    6. Deepak Kumar BEHERA & Umakant DASH, 2017. "Impact of GDP and tax revenue on health care financing: An empirical investigation from Indian states," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(611), S), pages 249-262, Summer.

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    More about this item

    Keywords

    Health expenditure; Political representation and participation; Fiscal capacity; Income elasticity; State’s priority; India;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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