The Effect of Positive and Negative Public Health Expenditure Shocks during Business Cycles on Health Status in Iran
Subject Areas : -Health economy
Azadeh Jahantabi Nejad
1
(
Master of Economics, School of Economics and Administrative Sciences, Department of Economics, Ferdowsi University, Mashhad, Iran
)
abolghasem golkhandan
2
(
Ph.D Student, Department of Economics, Lorestan University, Khoram Abad, Iran
)
Keywords: Business Cycles, Public Health Expenditure Shocks, Health Indicators, Non-linear Auto-Regressive Distributed Lags (NARDL), Asymmetric Effect,
Abstract :
Introduction: The impact of positive and negative shocks or the asymmetric impact of public health expenditures during periods of recession and boom (business cycles) on health status is of particular importance in terms of making appropriate decisions in the field of controlling the vulnerability of the lower classes of society in these periods. Based on this, the main purpose of this study is to estimate the asymmetric effect of public health expenditures on the health status in Iran during periods of recession and boom. Methods: The present descriptive-analytical and applied study using the time series data during the period of 1979-2020, investigated the long-term effects of positive and negative public health expenditures shocks during business cycles, per capita income and physician per capita on the death rate of children under 5 years and life expectancy. Filtering approach and three filters HP, BK and CF have been used to identify business cycles. Also, the models were estimated in the form of a regression model using the Non-linear Auto-Regressive Distributed Lags (NARDL) method in Eviews 12.0 software.Results: The results show that the public health expenditure had a pro-cyclical behavior during the period under review. In the long-term, the effect of negative public health expenditure shocks during business cycles on weakening health indicators is greater than the effect of its positive shocks on strengthening health indicators (confirmation of asymmetric effect). Also, the impact of positive and negative shocks on public health expenditures during periods of economic recession is greater than during periods of economic boom. With a 1% decrease in public health expenditures during periods of economic recession, the death rate of children under 5 years increases by 0.17% and the life expectancy decreases by 0.13%.Conclusion: Based on the results of this research, it is recommended to increase public health expenditures during periods of economic recession in order to reduce the vulnerability of the lower classes of society. But, considering the pro-cyclical behavior of public health expenditures, it is necessary to adopt policies and solutions to reduce the intensity of this behavior.
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20- Mojab R, Barkachian M. Analysis of the sensitivity of identifying business cycles to the choice of statistical method. Banking Monetary Research, 2014; 7(21): 381-405. [Persian]
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22- Harding D, Pagan A. Dissecting the Cycle, A Methodological Investigation. Journal of Monetary Economics, 2002; 49: 321-365.
23- Pesaran MH, Shin Y, Smith RJ. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 2001; 16: 289-326.
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25- Matuka A, Asafo S. Effects of services on economic growth in Albania: An ARDL approach. The Journal of International Trade & Economic Development, 2021; 30(6): 865-881. https:// Doi.org/10.1080/09638199.2021.1910723
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1- Boachie MK, RamuK, Põlajeva, T. Public health expenditures and health outcomes: new evidence from Ghana. Economies, 2018; 6(4): 58. https://doi.org/10.3390/economies6040058
2- Homaie Rad E, Vahedi S, Teimourizad A, Esmaeilzadeh F, Hadian F, Torabi Pour, A. Comparison of the effects of public and private health expenditures on the health status: A panel data analysis in Eastern Mediterranean countries. International Journal of Health Policy and Management 2013; 1: 163–167. Doi: 10.15171/ijhpm; 2013: 29.
3- Yardim MS, Cilingiroglu N, Yardim N. Catastrophic health expenditure and impoverishment in Turkey. Health Policy, 2010; 94: 26-33. https://doi.org/10.1016/j.healthpol.2009.08.006
4- Hanson K, Gilson L, Goodman C, Mills A, Smith R, Feachem R, Feachem NS, Koehlmoos TP, Kinlaw H. Is Private Health Care the Answer to the Health Problems of the World’s Poor? PLoS Medicine, 2008; 5(11): e233. Doi: 10.1371/journal.pmed.0050233
5- Asgari H, Badpa B. The effects of public and private health care expenditure on health status in Iran. JIUMS, 2015; 23(5): 36-46. [Persian]
6- Liang LL, Tussing AD. The cyclicality of government health expenditure and its effects on population health, Health Policy, 2019; 123(1): 96-103. Doi: 10.1016/j.healthpol.2018.11.004
7- Stuckler D, Basu S, McKee M. How government spending cuts put lives at risk. Nature, 2010; 465: 289. Doi:10.1038/465289a
8- Cleeren K, Lamey L, Meyer JH, De Ruyter K. How business cycles affect the healthcare sector: a cross-country investigation. Health Economics, 2016; 25: 787-800. https://doi.org/10.1002/hec.3187
9- Chen G, Inder B, Lorgelly P, Hollingsworth B. The cyclical behavior of public and private health expenditure in China. Health Economics, 2013; 22: 1071-1092. doi:10.1002/hec.2957
10- Rahman MM, Khanam R, Rahman M. Health care expenditure and health outcome nexus: new evidence from the SAARC-ASEAN region. Front Public Health, 2018; 14(1): 113. Doi: 10.1186/s12992-018-0430-1
11- Pu X, Zeng M, Luo Y. The effect of business cycles on health expenditure: A story of income inequality in China. Front Public Health, 2021; 9: 653480. Doi: 10.3389/fpubh; 2021: 653480.
12- Rezapour A, Mousavi A, Soleymanimovahed M. The Impact of business cycles on life expectancy in countries of the Iran vision plan 2025. Journal of Healthcare Management, 2018; 9(2): 7-17. [Persian]
13- Shahraki M. Public and private health expenditure and life expectancy in Iran. Payesh, 2019; 18(3): 221-230. [Persian]
14- Arab S, Ghaed E, Mazinani A. Compare the effect of public and private health expenditures on health status D-8 member countries. Innovation management and operational strategies, 2022; 3(1): 32-47. [Persian]
15- Golkhandan A. Measuring the impact of air pollution on health sector costs in Iran. Health Research Journal, 2017; 3(7), 157-166. [Persian]
16- Granger CW, Yoon G. Hidden co-integration. University of California, Working Paper; 2002.
17- Golkhandan A, Rostami M. Globalization; opportunity or threat for health? (A case study of Iran). Journal of healthcare management, 2016; 7(1): 81-95. [Persian]
18- Mowlaei M, Golkhandan A. American economic business cycles and compared with the case of Iranian economy. QJER, 2015; 14(4): 229-253. [Persian]
19- Taiebnia A, Ghasemi F. Measurement of business cycles in Iran. Journal of Economic Research, 2010; 45(3). [Persian]
20- Mojab R, Barkachian M. Analysis of the sensitivity of identifying business cycles to the choice of statistical method. Banking Monetary Research, 2014; 7(21): 381-405. [Persian]
21- Christiano LJ, Fitzgerald TJ. The Band-Pass Filter. NBER Working Paper; 2003: 7257.
22- Harding D, Pagan A. Dissecting the Cycle, A Methodological Investigation. Journal of Monetary Economics, 2002; 49: 321-365.
23- Pesaran MH, Shin Y, Smith RJ. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 2001; 16: 289-326.
24- Shin Y, Yu B, Greenwood-Nimmo M. Modelling asymmetric cointegration and dynamic multipliers in a nonlinear ARDL framework (October 21, 2013). Festschrift in Honor of Peter Schmidt, W.C. Horrace and R.C. Sickles, eds., Forthcoming. http://dx.doi.org/10.2139/ssrn.1807745
25- Matuka A, Asafo S. Effects of services on economic growth in Albania: An ARDL approach. The Journal of International Trade & Economic Development, 2021; 30(6): 865-881. https:// Doi.org/10.1080/09638199.2021.1910723
26- Schorderet Y. Asymmetric Cointegration. 2003; University of Geneva.
27- Mohamadianmansour, S. The impact of official development assistance and health aid on health in developing countries. Journal of healthcare management, 2020; 11(36): 83-94. [Persian]
