Original Article

Health Expenditure and Its Human Capital Determinants in Iran


Background: Human capital is an effective variable on the health condition of a society and its changing changes health expenditure as the proxy of health. This study aimed to investigate the relationship between human capital determinants and health expenditure.

Methods: An empirical model was used with 7 variables included gender parity (GPI) index, literacy rate, life expectancy at birth, GDP per capita, physician per capita, and hospital’s bed as the independent variable and health expenditure as depended variable. After unit root test of data by using Zivot-Andrews method, the model was estimated by ordinary least square (OLS) method.

Result: GPI had the negative and significant impact on health expenditure. Literacy had the positive and significant impact on depended variable. In addition, GDP per capita and life expectancy had positive and significant on health expenditure. Hospital bed and physician per capita did not have the significant relationship with health expenditure.  The value of R-squared and Durbin-Watson statistic were 0.99 and 1.95 respectively, which showed good model fit.

Conclusion: literacy rate and GPI index as the proxy of human capital had the different impact on health expenditure. The first had positive and the latter had negative. GDP per capita had the positive impact that showed health was a normal good.

1. Ke XU, Saksena P, Holly A (2011). The de-terminants of health expenditure: a coun-try-level panel data analysis. World Health Organization, Switzerland. Available from: https://www.who.int/health_financing/documents/report_en_11_deter-he.pdf?ua=1
2. Hitiris T, Posnett J (1992). The determinants and effects of health expenditure in de-veloped countries. J Health Econ, 11(2): 173-81.
3. Cantarero, D. (2005). Decentralization and health care expenditure: the Spanish case. Appl Econ Lett, 12(15): 963-966.
4. Hitiris T. Health care expenditure and inte-gration in the countries of the European Union. Appl Economics ,1997; 29:1–6.
5. Blomqvist A, Carter R (1997). Is health care really a luxury? J Health Econ, 16(2): 207-229.
6. Giannoni M, Hitiris T (2002). The regional impact of health care expenditure: the case of Italy. Appl Econ, 34(14): 1829-36.
7. Di Matteo L, Di Matteo R (1998). Evidence on the determinants of Canadian provin-cial government health expenditures: 1965–1991. J Health Econ, 17(2): 211-228.
8. Rahman T (2008). Determinants of public health expenditure: some evidence from Indian states. Appl Econ Lett, 15(11): 853-857.
9. Barro R, Lee J (2013). A new data set of ed-ucational attainment in the world, 1950–2010. J Develop Econ, 104, 184-198.
10. Becker GS, Philipson TJ, Soares RR (2005). The quantity and quality of life and the evolution of world inequality. Am Econ Rev, 95(1): 277-291.
11. World Bank Group. World Development Indicators 2016. https://blogs.worldbank.org/opendata/2016-edition-world-development-indicators-out-three-features-you-won-t-want-miss
12. Layard R. (2009). The 3rd OECD World Forum on “Statistics, Knowledge and Policy” Charting Progress, Building Vi-sions, Improving Life. http://citeseerx.ist.psu.edu/viewdoc/download?doi=
13. Au AK, Altman Y, Roussel J (2008). Em-ployee training needs and perceived value of training in the Pearl River Delta of China. Journal of European Industrial Training, 32(1): 19-31.
14. Barro RJ (1989). Economic growth in a cross section of countries. National Bu-reau of Economic Research, the U.S. Available from: https://www.nber.org/papers/w3120
15. Barro RJ, Lee JW (1993). International com-parisons of educational attainment. Journal of Monetary Economics, 32(3): 363-394.
16. Murthy VN, Okunade AA (2016). Determi-nants of US health expenditure: Evidence from autoregressive distributed lag (ARDL) approach to cointegration. Econ Model, 1(59): 67-73.
IssueVol 49 No 11 (2020) QRcode
SectionOriginal Article(s)
DOI https://doi.org/10.18502/ijph.v49i11.4737
Health Expenditure Human capital Education

Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
How to Cite
MOAYEDFARD A, GHORBANI S, EMAMGHOLIPOUR SEFIDDASHTI S. Health Expenditure and Its Human Capital Determinants in Iran. Iran J Public Health. 49(11):2189-2193.