Premium
Public–private mix of health expenditure: A political economy and quantitative analysis
Author(s) -
Li Shuyun May,
Moslehi Solmaz,
Yew Siew Ling
Publication year - 2016
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12216
Subject(s) - public economics , aggregate expenditure , voting , public health , sample (material) , health care , public expenditure , economics , democracy , politics , business , economic growth , political science , public finance , macroeconomics , medicine , law , chemistry , nursing , chromatography
This paper constructs a simple model to examine decisions on public and private health spending under majority voting. In the model, agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure. The health status of an agent is determined by a CES composite of public and private health expenditure. The existence and uniqueness of the voting equilibrium are established. A quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public‐private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries.