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Testing the long-run relationship between health expenditures and GDP in the presence of structural change: the case of Spain

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  • Vicente Esteve
  • Jose Martinez-Zahonero

Abstract

This article examines the long-run relationship between per capita US$ PPP health expenditures (HE) and per capita US$ PPP national income (GDP), using Spanish data over the period 1960 to 2001. We extend previous analyses by addressing the question of whether this relationship is stable over time, allowing for structural changes at an unknown date. Our empirical results are consistent with the existence of a long-run relationship between both variables, with two structural changes in 1971 and 1991. On the other hand, health would have been characterized as a luxury commodity, even though increasingly less over time.

Suggested Citation

  • Vicente Esteve & Jose Martinez-Zahonero, 2007. "Testing the long-run relationship between health expenditures and GDP in the presence of structural change: the case of Spain," Applied Economics Letters, Taylor & Francis Journals, vol. 14(4), pages 271-276.
    • Handle: RePEc:taf:apeclt:v:14:y:2007:i:4:p:271-276
    DOI: 10.1080/13504850500425196
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    Cited by:

    1. Liping Ye & Xinping Zhang, 2018. "Nonlinear Granger Causality between Health Care Expenditure and Economic Growth in the OECD and Major Developing Countries," IJERPH, MDPI, vol. 15(9), pages 1-16, September.
    2. Eugene Kouassi & Oluyele Akinkugbe & Noni Oratile Kutlo & J. M. Bosson Brou, 2018. "Health expenditure and growth dynamics in the SADC region: evidence from non-stationary panel data with cross section dependence and unobserved heterogeneity," International Journal of Health Economics and Management, Springer, vol. 18(1), pages 47-66, March.
    3. Paresh Kumar Narayan, 2010. "Modelling health and output at business cycle horizons for the USA," Health Economics, John Wiley & Sons, Ltd., vol. 19(7), pages 872-880, July.
    4. Bhaskara Rao, B. & Rao, Gyaneshwar, 2009. "Structural breaks and energy efficiency in Fiji," Energy Policy, Elsevier, vol. 37(10), pages 3959-3966, October.
    5. Ayhan Aytaç & Umut Akduğan, 2020. "Türkiye’de Sanayi Üretiminin Sağlık Harcamalarına Etkisi," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(33), pages 33-50, December.

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