TITLE:
Empirical Analysis of Relationship between Per Capita Health Expenditure and Economic Growth Based on Vector Autoregressive Model (VAR) in Mongolia
AUTHORS:
Uranbileg Bayarbat, Yibing Li
KEYWORDS:
Health Expenditure, VAR Model, Impulse Response Function, Variance Decomposition, Mongolia
JOURNAL NAME:
Theoretical Economics Letters,
Vol.10 No.1,
February
19,
2020
ABSTRACT: The present research aimed to study the dynamic
correlation between per capita health expenditure (PCHE) and economic growth in
Mongolia. The data from the period of 1993-2018 were used. A Vector
Autoregressive (VAR) model was established between per capita gross domestic
product (PGDP) and PCHE. Variance decomposition as well as impulse response
function was used to analyze the dynamic relationship among variables. The results
revealed that correlation was found between PCHE and PGDP with obvious one-way
Granger causality. Moreover, the results showed that economic development had
positive impact on PCHE growth for 1 - 3
(short term) years in Mongolia. However, the response of the two variables was
gradually eradicated in the long term by
impulse response function. The contribution rate of PGDP on PCHE increased from
0% to
18.14% by six periods. This study recommended
that Mongolian policymakers not only increase the budget to the health but rather oversee the budget spending, increase public health expenditure
and improve private health insurance system, which leads
to the upgraded national health and can reduce personal health burden.