Title: Time-varying income elasticities of healthcare expenditure for the OECD and the Eurozone
Authors: Isabel Casas - University of Southern Denmark (Denmark) [presenting]
Jiti Gao - Monash University (Australia)
Shangyu Xie - University of International Business and Economics (China)
Bin Peng - University of Bath (United Kingdom)
Abstract: Income elasticity dynamics of health expenditure is considered for the OECD and the Eurozone over the period 1995-2014. A new non-linear cointegration model is studied which has fixed effects, controlling for cross-section dependence and unobserved cross section and time heterogeneity. Most importantly, its coefficients can vary over time and its variables can be non-stationary. The resulting asymptotic theory is fundamentally different, with a faster rate of convergence, from similar kernel smoothing methodologies.