Multivariate Cointegration Technique Estimation of Health Demand Function: The Case of Croatia

Abstract

In this paper multivariate Johansen cointegration technique is used in order to estimate health demand function in Croatia. Empirical estimate is based on the theoretical foundation of Grossman's model. According to the estimate, the number of physician visits in Croatia is a function of percentage of urban population, GDP, number of beds per 100 000 people, number of physicians per 100 000 people and total fertility rate. All estimated systems demonstrated strong feedbacks indicating number of endogenous variables greater than one.health demand function, health capital, Grossman's model, Croatian health care system, Johansen cointegration technique