The Determinants of Health Expenditures in Tunisia: An ARDL Bounds Testing Approach

The Determinants of Health Expenditures in Tunisia: An ARDL Bounds Testing Approach

Sami Chaabouni (University of Sfax, Tunisia) and Chokri Abednnadher (University of Sfax, Tunisia)
DOI: 10.4018/978-1-5225-3168-5.ch015
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Abstract

This article examines the determinants of health expenditures in Tunisia during the period 1961-2008, using the Autoregressive Distributed Lag (ARDL) approach by Pesaran et al. (2001). The results of the bounds test show that there is a stable long-run relationship between per capita health expenditure, GDP, population ageing, medical density and environmental quality. In fact, on the one hand there are the short-run and long-run results which reveal that health care is a necessity, not a luxury good. On the other hand, results of the causality test show that there is a bidirectional causal flow from health expenditures to income, both in the short and in the long run.
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1. Introduction

Since the 1960s, the increase of health expenditure has caused much concern all over the world. A number of studies have attempted to explain the rise in health expenditures and suggested what variables can be influenced to reduce the costs. All of these studies have considered the approach of the demand function to specify their models. Specifically, health care expenditures are hypothesized to be a function of real per capita income and other non income variables.

The non income factors have been identified in literature. So, what may affect the increase of health expenditures are the following:

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