Health Expenditure and Economic Growth in India - An Econometric Exploration

Posted: 23 Sep 2018

See all articles by Vijay Jariwala

Vijay Jariwala

Sardar Patel University - Department of Economics

Date Written: September 5, 2018

Abstract

Increase in health expenditure has a huge impact on the socioeconomic conditions in any country. Though, there is no consensus as to whether the rising health expenditure is beneficial or detrimental to economic growth. The present study chose India as a case study to empirically examine a complex relationship between health expenditure and economic growth and used time series data from 1980-81 to 2014-15 for gross domestic product (GDP) and health expenditure. The findings from the Johansen Cointegration test indicated that there existed a long-run relationship between India’s health expenditure and GDP. Furthermore, the Granger causality test detected bi-directional causality from GDP to health expenditure. These results were further confirmed by findings from the impulse response function. This means that India represents an example of a developing economy where the size of health expenditure expands in the process of economic transformation.

Keywords: Health Expenditure, GDP, Econometric Exploration

JEL Classification: I15, H51, C01

Suggested Citation

Jariwala, Vijay Sureshchandra, Health Expenditure and Economic Growth in India - An Econometric Exploration (September 5, 2018). Available at SSRN: https://ssrn.com/abstract=3244190

Vijay Sureshchandra Jariwala (Contact Author)

Sardar Patel University - Department of Economics ( email )

V V Nagar
Anand, Gujarat 388120
India

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