Time Series Analysis of Determinants of Health Care Expenditure in Iran: A Bound Test Cointegration Approach

specifying the determinants of healthcare expenditure is one of the most important challenges in the health sector. The current study was aimed to assess factors affecting government health care expenditure in Iran.
to identify short-term and long-term determinants of healthcare expenditure in Iran during 1971-2007, Auto Regressive Distributive Lag (ARDL) bound testing approach to co integration was used. The explanatory variables were defined into economic, demographic and supply side categories. The data were collected from the official websites of the Iranian Statistics Centre, Central Bank of Iran, and the Ministry of Health.
we found health care expenditures as necessary goods in both short-term and long-term. In long-term, per capita income (β = 0.815, P-value = 0.033), elderly population (β = - 1.790, P-value Government health expenditure is necessary goods in both short and long run. Thus governmental health care expenditure does should grow proportional to increase in national income. This could result to decrease in out of pocket payment.