Health expenditures in Turkey: an econometric application

The main aim of the study is to examine the long-term relationships between total, public and private expenditures. The long term relationships between health expenditures, are examined using Johansen Co-integration Method, for the years 1988-2008, for both demographic variables of Turkey that are 65 + age population rate, the number of doctors per capita and the birth rate and the macroeconomic variables that are GDP per capita, health price index and public compensation ratio. In Turkey, the studies on this subject is very limited. Especially in recent years after the health reform there was only a few study on this issue. Also, studies for OECD countries about this issue does not include Turkey.In this study, there are health expenditure models that are established by demographic and macroeconomic variables covers the period 1988-2008. Because of the lack of the past yearly data, mixed models that includes much more variables can not be established. As a result of the co-integration analysis, like demographic models also for macroeconomic variables (total, public and private health spending) there have been identified long-term relationships. As a result, to the bring out the relations between the variables there have made variance decomposition and impulse-response graphs were drawn.When Johansen co-integration vectors are examined, the total health expenditure was found luxury good, and also public health expenditure was found luxury on the other hand, private health expenditure was found to be a necessary good. A 10% increase in GDP will occur 12.4% of total health expenditures' hood, while public spending 10,9% caused increase in private health spending, while 78,3% were caused by an increase.Key Words: health expenditure, income, co-integration, variance decomposition, impulse, health reform.