The Effects of Healthcare Quality on the Willingness to Pay More Taxes to Improve Public Healthcare: Testing Two Alternative Hypotheses from the Research Literature

Abstract

The research literature discusses two opposite hypotheses regarding the possible effects of healthcare quality on the willingness to pay more taxes to improve public healthcare. One hypothesis theorizes that a lower quality of public healthcare may weaken the willingness to pay more taxes towards improving it. Another hypothesis posits that a low quality of public healthcare may strengthen the willingness to pay more taxes towards improving it. We tested both hypotheses on a diverse sample of 27 post-communist countries within Eurasia and Southern and Eastern Europe over a period of five years. We apply a binary logistic model for each country under investigation. The model is estimated by regressing the willingness to pay more taxes on six dimensions of quality, while controlling for covariates and the dummy for 2016. We found empirical support for both hypotheses, and hence none of the hypotheses gleaned from the literature is a clear “winner.” However, we also found that the situation is less straightforward and more nuanced than is usually acknowledged within the literature. Our findings also suggest the effect is specific with respect to both a quality dimension and a country tested.