Convergence of health care expenditures across the US states : a reconsideration

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Authors

Apergis, Nicholas
Chang, Tsangyao
Christou, Christina
Gupta, Rangan

Journal Title

Journal ISSN

Volume Title

Publisher

Springer

Abstract

Current evidence on the convergence of health care expenditures across the US states into a single convergence club is non-existent. Against this backdrop, we revise this issue using a modified panel unit root test that accounts for smooth structural changes spanning the period of 1966-2009. The results illustrate that the ratio of the individual health care expenditures relative to the cross-sectional average is broken trend-stationary, not only in the aggregate panel, but also across all 50 US states, as indicated by a sequential panel selection method. In addition, the findings also document that the evidence of convergence in health care expenditures is possibly due to the convergence of personal disposable income across the US states. These results are expected to have important policy implications for the US health care market.

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Keywords

Health care expenditures, Convergence, Unit root tests, Fourier function, Sequential panel selection methodology

Sustainable Development Goals

Citation

Apergis, N, Chang, T, Christou, C & Gupta, R 2016, 'Convergence of health care expenditures across the US states : a reconsideration', Social Indicators Research, NYP