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      Does morbidity matter? Perceived health status in explaining the share of healthcare expenditures

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      Author
      Solakoğlu, E. G.
      Civan, A.
      Date
      2012
      Source Title
      Applied Economics
      Print ISSN
      0003–6846
      Electronic ISSN
      1466-4283
      Publisher
      Routledge
      Volume
      44
      Issue
      16
      Pages
      2027 - 2034
      Language
      English
      Type
      Article
      Item Usage Stats
      145
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      Abstract
      We argue that the demand for healthcare services can be better explained by individual need based variables rather than by macro variables such as the Gross Domestic Product (GDP) per capita and the share of public healthcare expenditures. This study introduces a self-rated health variable called morbidity that describes individual needs for health care – healthy individuals need less health care than sick ones – and that is measured through personal interviews conducted by the Organization for Economic Co-operation and Development (OECD). In addition, stationary properties of the series are considered in order to understand the effect of shocks to expenditure behaviour on health care. Stationary test results show that we should not only use differenced values for the model variables but also incorporate time-specific effects into the model. Using the appropriate specification and accounting for the time effect, we find evidence supporting the hypothesis that the share of healthcare expenditure in GDP rises with the increased need for health care. The need for health care is also found to be more important than per capita GDP when explaining the change in the share of healthcare expenditures for the examined countries.
      Keywords
      Healthcare expenditures
      Morbidity
      Two-way model
      Permalink
      http://hdl.handle.net/11693/48263
      Published Version (Please cite this version)
      http://dx.doi.org/10.1080/00036846.2011.558476
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      • Banking and Finance 37
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