Determinants of household health spending in Mexico

Abstract

In Mexico, out-of-pocket and catastrophic spending are persistent across the income distribution spectrum, and affiliation with health institutions does not safeguard individuals against such possibilities. This study estimates tobit models to analyze the determinants of out-of-pocket and catastrophic health expenditures, and finds that regional, individual, and household characteristics cause heterogeneity in health spending behaviors. The data suggest that the effective use of public services reduces, albeit insufficiently, the probability of incurring excessive expenditures. Public policies should focus on health promotion and disease prevention, as well as on reducing the gaps in the quality of public health services.