Factors Affecting Health Expenditures of Households in Iran: Application of Ordered Probit Model

Health expenditure, one of the households spending, is affected by family’s socio-economic status, and government health policies, such as health insurance. Therefore, this paper aimed to analyze the impact of these conditions on different levels of health expenditures of households in Iran.
In this applied study, an econometric model, Ordered Probit, was used. The related data on household expenditure and income in 2014 were collected from Statistical Center of Iran by means of a questionnaire. The population consisted of 23573 Iranian households living in different areas in Iran. Estimation of results and Data analysis was performed using STATA 14.0.
According to the findings, householder education level, age, gender (male householders), per capita income, size of household, and health insurance coverage were positively related to household health expenditure. There was also a negative marginal effects for above variables in group one of dependent variable. It means that households with better socio-economic situation, have a low tendency for low health expenditures which again becomes positive for higher health expenditures. Moreover, households with rural insurance, social security insurance, complementary insurance and medical treatment insurance paid lower health expenditures, respectively.
Households with better socio-economic status, spend more on their health care. Since households pay differently for different health insurances, it is recommended that government provide a fair basic insurance package of the same quality of services to cover all households, a package which is not affected by economic inequality.