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Is health care expenditure across Europe converging? Findings from the application of a nonlinear panel unit root test

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  • Chi Lau
  • Ka Fung
  • Lee Pugalis
Abstract
Uneven patterns of health care expenditure are a prominent feature of late capitalist society. Across Europe, spearheaded by European Union (EU) economic integration, there continues to be debate concerning health care expenditure and, more specifically, to what extent there has been an apparent convergence or divergence. The extant literature is contradictory, inconclusive and potentially misleading, characterised as a ‘mixed bag’. Therefore, as a means of resolving some of these tensions, this paper tests the hypothesis that health care expenditure per capita has converged. Departing from a conceptual review of key factors influencing health care expenditure, this paper applies a non linear time series test to longitudinal data for 14 EU countries for the period 1970–2008. This paper fills a notable research gap by better accounting for the existence of nonlinearity in the growth dynamics of health care expenditure by utilising the nonlinear panel unit root test. Using different reference countries, we cannot reject the null hypothesis of unit root-evidence against the notion of convergence. This generates some notable policy implications and raises issues for those researching this topic. Copyright Eurasia Business and Economics Society 2014

Suggested Citation

  • Chi Lau & Ka Fung & Lee Pugalis, 2014. "Is health care expenditure across Europe converging? Findings from the application of a nonlinear panel unit root test," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(2), pages 137-156, December.
    • Handle: RePEc:spr:eurasi:v:4:y:2014:i:2:p:137-156
    DOI: 10.1007/s40821-014-0014-9
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    5. Son Hong Nghiem & Luke Brian Connelly, 2017. "Convergence and determinants of health expenditures in OECD countries," Health Economics Review, Springer, vol. 7(1), pages 1-11, December.
    6. Fabian Grünwald & Tom Stargardt, 2024. "Harmonizing regulatory market approval of products with high safety requirements: Evidence from the European pharmaceutical market," Health Economics, John Wiley & Sons, Ltd., vol. 33(7), pages 1546-1564, July.
    7. Gülsüm AKARSU & Reyhan CAFRI & Hanife BIDIRDI, 2019. "Are Public-Private Components of Health Care Expenditures Converging Among OECD Countries? Evidence from a Nonlinear Panel Unit Root TestAbstract: Many countries devote an increasing proportion of the," Sosyoekonomi Journal, Sosyoekonomi Society.

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    More about this item

    Keywords

    Health care expenditures; Nonlinear panel unit root tests; EU health reform; I10; I18;
    All these keywords.

    JEL classification:

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

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