Is the Demand for Health Care Income Elastic? The Case of 40 Sub-Saharan African Countries

This paper uses panel data (1995 to 2011) from 40 Sub-Sahara African countries to analyze the income elasticity of health care expenditure along with some of the other theoretical determinants. The empirical results of the instrumental variable approach indicate that per capita income is a core and statistically significant determining factor of health expenditure. The value of the elasticity is about 0.48, suggesting that health expenditure as a commodity is a necessity for this region. In simple words, the goal of the system in this region is curative rather than caring. The percentage of population age 65 or older and official development assistance are found to have a significant role in increasing health expenditure. This research recommends that healthcare expenditure in sub Saharan Africa be a priority as it is a necessity. Public investment on healthcare should also be seen as an opportunity towards promoting health and increasing production, as opposed to a burden

Is the Demand for Health Care Income Elastic? The Case of 40 Sub-Saharan African Countries

This paper uses panel data (1995 to 2011) from 40 Sub-Sahara African countries to analyze the income elasticity of health care expenditure along with some of the other theoretical determinants. The empirical results of the instrumental variable approach indicate that per capita income is a core and statistically significant determining factor of health expenditure. The value of the elasticity is about 0.48, suggesting that health expenditure as a commodity is a necessity for this region. In simple words, the goal of the system in this region is curative rather than caring. The percentage of population age 65 or older and official development assistance are found to have a significant role in increasing health expenditure. This research recommends that healthcare expenditure in sub Saharan Africa be a priority as it is a necessity. Public investment on healthcare should also be seen as an opportunity towards promoting health and increasing production, as opposed to a burden