The Relationship between Health Expenditure and GDP in Iran

In this study, we focus on two issues. The first is an empirical examination of the relationship between real health care expenditure and real GDP. The second issue of interest is related to estimating the elasticity parameter of health care expenditure. This paper uses recently developed tests for the existence of a long run relationship to analyse the links between health care expenditure and GDP. Our findings include robust evidence that, for Iran, the income elasticity for health care expenditure is close to one and that the elasticity value is stable over the estimation period.