Causation between health and income: a need to panic
Tóm tắt
This article tests whether health has improved income or income has improved health in OECD countries over the last 50 years. A theoretical framework for both directions of causation is first outlined. A panel time-series approach is then taken and, unlike similar work, common shocks across countries (‘cross-sectional dependence’) are taken into account in the analysis using the PANIC (Panel Analysis of Non-stationarity in Idiosyncratic and Common components) approach of Bai and Ng. It is found that better health improves income more generally while income in turn also affects health. This finding is shown to be robust to dynamic specification.
Tài liệu tham khảo
Acemoglu D, Johnson S (2007) Disease and development: the effect of life expectancy on economic growth. J Polit Econ 115(6): 925–985
Adda J, von Gaudecker H, Banks J (2009) The impact of income shocks on health: evidence from cohort data. J Eur Econ Assoc 7(6): 1361–1399
Anand S, Ravallion M (1993) Human development in poor countries: on the role of private incomes and public services. J Econ Perspect 7(1): 133–150
Andrews DWK (2005) Cross-section regression with common shocks. Econometrica 73(5): 1551–1585
Ashraf QH, Lester A, Weil DN (2009) When does improving health raise GDP?. NBER Macroecon Annu 23(1): 157–204
Auster R, Leveson I, Sarachek D (1969) The production of health, an exploratory study. J Hum Resour 4(4): 411–436
Bai J, Ng S (2001) A PANIC attack on unit roots and cointegration. Boston college working papers in Economics 519
Bai J, Ng S (2002) Determining the number of factors in approximate factor models. Econometrica 70(1): 191–221
Bai J, Ng S (2004) A Panic attack on unit roots and cointegration. Econometrica 72(4): 1127–1177
Bai J, Ng S (2008) Large dimensional factor analysis. Now Pub, Boston
Bai J, Kao C, Ng S (2009) Panel cointegration with global stochastic trends. J Econometrics 149(1): 82–99
Baltagi BH, Moscone F (2010) Health care expenditure and income in the OECD reconsidered: evidence from panel data. Econ Model 27(4): 804–811
Banerjee A, Marcellino M, Osbat C (2004) Some cautions on the use of panel methods for integrated series of macroeconomic data. Econometrics J 7(2): 322–340
Banerjee A, Marcellino M, Osbat C (2005) Testing for PPP: should we use panel methods?. Empirical Econ 30(1): 77–91
Barker DJ (1992) Fetal and infant origins of adult disease. British Medical Journal, London
Barro R (1996) Health and economic growth. Program on Public Policy, and Health Health and Human Development Division, Pan American Health Organization, Washington
Barro R, Sala-i-Martin X (2004) Economic growth, 2nd edn. Belknap Press of Harvard University Press, Cambridge
Bleakley H (2007) Disease and development: evidence from Hookworm eradication in the American South. Q J Econ 122(1): 73–117
Bleakley H (2009) Economic effects of childhood exposure to tropical disease. Am Econ Rev 99(2): 218–223
Bloom DE, Canning D (2000) The health and wealth of nations. Science(Washington) 287(5456): 1207–1209
Bloom DE, Canning D, Sevilla J (2004) The effect of health on economic growth: a production function approach. World Dev 32(1): 1–13
Bloom DE, Canning D, Mansfield RK, Moore M (2007) Demographic change, social security systems, and savings. J Monetary Econ 54(1): 92–114
Bloom DE, Canning D, Fink G (2009) Disease and development revisited. NBER working paper no. w15137
Bonds MH, Keenan DC, Rohani P, Sachs JD (2010) Poverty trap formed by the ecology of infectious diseases. Proc R Soc B 277: 1185–1192
Bos E, Vu MT, Stephens PW (1992) Sources of world bank estimates of current mortality rates. Policy research working paper 851
Breitung J, Pesaran MH (2008) Unit roots and cointegration in panels. In: Matyas L, Sevestre P (eds) The econometrics of panel data, pp 279-322
Chakraborty S (2004) Endogenous lifetime and economic growth. J Econ Theory 116(1): 119–137
Chang Y (2004) Bootstrap unit root tests in panels with cross-sectional dependency. J Econometrics 120(2): 263–293
Choi I, Chue TK (2007) Subsampling hypothesis tests for nonstationary Panels with applications to exchange rates and Stock prices. J Appl Econometrics 22: 233–264
Costa-Font J, Gemmill M, Rubert G (2011) Biases in the healthcare luxury good hypothesis?: a meta-regression analysis. J R Stat Soc 174(1): 95–107
Cutler DM, Meara E (2000) The technology of birth: is it worth it?. forum for health economics, Policy: 3 (Frontiers in Health Policy Research), Article 3
Cutler D, Deaton A, Lleras-Muney A (2006) The determinants of mortality. J Econ Perspect 20(3): 97–120
Deolalikar AB (1988) Nutrition and Labor Productivity in Agriculture: Estimates for Rural South India. Rev Econ Stat 70(3): 406–413
Devlin N, Hansen P (2001) Health care spending and economic output: Granger causality. Appl Econ Lett 8(8): 561–564
Ehrlich I, Lui FT (1991) Intergenerational trade, longevity, and economic growth. J Polit Econ 99(5): 1029–1059
Erdil E, Yetkiner IH (2009) The Granger-causality between health care expenditure and output: a panel data approach. Appl Econ 41(4): 511–519
Evans R, Stoddard G (1990) Producing health care, consuming health care. Soc Sci Med 31: 1347–1363
Fayissa B, Gutema P (2005) Estimating a health production function for Sub-Saharan Africa (SSA). Appl Econ 37(10): 155–164
Feinstein JS (1993) The Relationship Between Socioeconomic Status and Health: A Review of the Literature. Milbank Q 71: 279–322
Freeman DG (2003) Is health care a necessity or a luxury? Pooled estimates of income elasticity from US state-level data. Appl Econ 35(5): 495–502
Gengenbach C, Palm FC, Urbain J (2006) Cointegration testing in panels with common factors. Oxford Bullet Econ Stat 68(s1): 683–719
Gengenbach C, Palm FC, Urbain J (2010) Panel Unit root tests in the presence of cross-sectional dependencies: comparison and implications for modelling. Econometric Rev 29(2): 111–145
Gerdtham UG, Löthgren M (2000) On stationarity and cointegration of international health expenditure and GDP. J Health Econ 19(4): 461–475
Gonzalo J, Pitarakis J-Y (1999) Dimensionality effect in cointegration analysis. In: Engle R, White H (eds) Cointegration, causality, and forecasting. A Festschrift in Honour of Clive W.J. Granger. Oxford University Press, Oxford, pp 212–229
Grossman M (1972) On the concept of health capital and the demand for health. J Polit Econ 80(2): 223–255
Grossman M (1999) The human capital model of the demand for health. NBER working paper series no. 7078
Haas JD, Brownlie T IV (2001) Iron deficiency and reduced work capacity: a critical review of the research to determine a causal relationship. J Nutr 131(2): 676S–690
Hadri K (2000) Testing for stationarity in heterogeneous panel data. Econometrics J 3: 148–161
Hadri K, Kurozumi E (2008) A Simple panel stationarity test in the presence of cross-sectional dependence. Global COE Hi-Stat discussion paper series 016
Hall RE, Jones CI (2007) The value of life and the rise in health spending. Q J Econ 122(1): 39–72
Hamilton JD (1994) Time series analysis. Princeton University Press, Harvey
Heston A, Summers R, Aren B (2009) Penn world table version 6.3. Centre for International Comparisons of Production, Income and Prices
Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econometrics 115(1): 53–74
Jamison DT, Lawrence J (2005) Health’s Contribution to Economic Growth in an Environment of Partially Endogenous Technical Progress. Health and economic growth: findings and policy implications, pp 67
Kalemli-Ozcan S (2002) Does the Mortality decline promote economic growth?. J Econ Growth 7(4): 411–439
Kao C (1999) Spurious regression and residual-based tests for cointegration in panel data. J Econometrics 90(1): 1–44
Lee R, Mason A, Miller T (2000) Life cycle saving and the demographic transition: the case of Taiwan. Pop Dev Rev 26: 194–219
Leon DA (2011) Trends in European life expectancy: a salutary view. Int J Epidemiol 40(2): 271–277
Levin A, Lin C (1993) Unit root tests in panel data: new results. Discussion paper 93-56, University of California, San Diego
Levin A, Lin CF, Chu CSJ (2002) Unit root tests in panel data: asymptotic and finite-sample properties. J Econometrics 108(1): 1–24
Lorentzen P, McMillan J, Wacziarg R (2008) Death and development. J Econ Growth 13(2): 81–124
Lutkepohl H (2007) General-to-specific or specific-to-general modelling? An opinion on current econometric terminology. J Econometrics 136(1): 319–324
Maddala GS, Wu S (1999) A Comparative study of unit root tests with panel data and a new simple test. Oxford Bull Econ Stat 61: 631–652
Mankiw NG, Romer D, Weil DN (1992) A contribution to the empirics of economic growth. Q J Econ 107(2): 407–437
Mayer D (2001) The Long-term impact of health on economic growth in latin America. World Dev 29(6): 1025–1033
Miguel E, Kremer M (2004) Worms: identifying impacts on education and health in the presence of treatment externalities. Econometrica 72(1): 159–217
Miller RDJM, Frech HEI (2000) Is there a link between pharmaceutical consumption and improved health in OECD countries?. PharmacoEconomics 18(13): 33–45
Moon HR, Perron B (2004) Testing for a unit root in panels with dynamic factors. J Econometrics 122(1): 81–126
Moscone F, Tosetti E (2010) Health expenditure and income in the United States. Health Econ 19: 1385–1403
Murray CJ, Lopez AD (1997a) Global mortality, disability, and the contribution of risk factors: Global Burden of Disease Study. The Lancet 349(9063): 1436–1442
Murray C, Lopez AD (1997b) Mortality by cause for eight regions of the world: Global Burden of Disease Study. Lancet 349: 1269–1276
Murray CJ, Salomon JA, Mathers C (2000) A critical examination of summary measures of population health. Bullet World Health Org 78(8): 981–994
Newhouse JP (1977) Medical-care expenditure: a cross-national survey. J Human Resour 12(1): 115–125
O’Connell PGJ (1998) The overvaluation of purchasing power parity. J Int Econ 44(1): 1–19
Organization for Economic Cooperation and Development (2011) OECD Health Data. http://stats.OECD.org. Accessed on July 2011
Paxson C, Schady N (2007) Does money matter? the effects of cash transfers on child health and development in rural ecuador. World bank policy research working paper 4226. Impact evaluation series no. 15
Pedroni P (2004) Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric Theory 20(03): 597–625
Pesaran MH (2004) General Diagnostic tests for cross section dependence in panels. CESifo working paper 1229
Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Econometrics 22(2): 265–312
Pesaran MH., Smith R (1995) Estimating long-run relationships from dynamic heterogeneous panels. J Econ 68(1): 79–113
Phillips PCB, Sul D (2003) Dynamic panel estimation and homogeneity testing under cross section dependence. Econometrics J 6(1): 217–259
Pritchett L, Summers LH (1996) Wealthier is Healthier. J Hum Resour 31(4): 841–868
Roberts J (1999) Sensitivity of elasticity estimates for OECD health care spending: analysis of a dynamic heterogeneous data field. Health Econ 8(5): 459–472
Ruhm CJ (2004) Macroeconomic conditions, health and mortality. Working paper 11007, National Bureau of Economic research
Schultz TP (1999) Health and schooling investments in Africa. J Econ Perspect 13(3): 67–88
Soares RR (2005) Mortality reductions, educational attainment, and fertility choice. Am Econ Rev 95(3): 580–601
Thornton J (2002) Estimating a health production function for the US: some new evidence. Appl Econ 34(4): 59–62
United Nations Development Programme (UNDP) (1990) Human development report. Oxford University Press, New York
Wagstaff A (1986) The demand for health: some new empirical evidence. J Health Econ 5(3): 195–233
Weil DN (2007) Accounting for the effect of health on economic growth. Q J Econ 122(3): 1265–1306
Westerlund J (2007) Testing for error correction in panel data. Oxford Bull Econ Stat 69(6): 709–748
WHO: (2000) World health report. Health systems: improving performance. World Health Organisation, Geneva
WHO Commission on Macroeconomics and Health: (2001) Macroeconomics and health: investing in health for economic development. World Health Organisation, Geneva
World Bank (2009) World development indicators