To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries' data. This study expands this work using a panel data set for 173 countries for the 1995-2006 period. We found that health care has an income elasticity that qualifies it as a necessity good, which is consistent with results of the most recent studies. Furthermore, we found that health care spending is least responsive to changes in income in low-income countries and most responsive to in middle-income countries with high-income countries falling in the middle. Finally, we found that 'Voice and Accountability' as an indicator of good governance seems to play a role in mobilizing more funds for health. © 2012 Springer Science+Business Media New York.
CITATION STYLE
Farag, M., NandaKumar, A. K., Wallack, S., Hodgkin, D., Gaumer, G., & Erbil, C. (2012). The income elasticity of health care spending in developing and developed countries. International Journal of Health Care Finance and Economics, 12(2), 145–162. https://doi.org/10.1007/s10754-012-9108-z
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