Determinants of Household Health Expenditure in Poland

Abstract

The aim of the paper is to identify and quantify the social and economic determinants of private health expenditures by Polish households with a primary interest in the role of income. Panel data regression analysis is used to estimate relationships between socioeconomic factors and households’ health expenditures. Fixed-effects, instrumental variables and dynamic panel approaches are used in the estimation. The data is taken from the Local Data Bank of Poland’s Central Statistical Office (GUS) and covers the period 1999-2015. Real per capita health expenditures are used as a dependent variable and the covariates are real disposable income, health status, healthcare availability, healthcare prices, pollution, and population age structure. Depending on model specification, the income elasticity of household health expenditure ranges from 0.45 to 0.87. Income elasticity lower than one means that healthcare financed directly from household budgets has the characteristics of a necessity good in Poland. Other factors that correlate with health spending are the proportion of the population over 70 years old and health status measured by life expectancy. Meanwhile, healthcare supply was a factor that proved to be unrelated to households’ health expenditure. On the other hand, the impact of healthcare prices and pollution is unclear.

Keywords

• health expenditure
• households
• regions
• panel regression
• income elasticity