Technology as a 'major driver' of health care costs

A cointegration analysis of the Newhouse conjecture

Albert A. Okunade, Vasudeva N. R. Murthy

Research output: Contribution to journalArticle

138 Citations (Scopus)

Abstract

Per capita real income on the demand-side and technological change, proxied by total R&D and health R&D spending, on the supply-side are hypothesized as major drivers of per capita real health care expenditure in the US during the 1960-1997 period. The findings are robust to a battery of unit root and cointegration tests. They support the Newhouse [Journal of Economic Perspectives 6 (1992) 3] conjecture that technological change is a major escalator of health care expenditure and confirm a significant and stable long-run relationship among per capita real health care expenditure, per capita real income and broad-based R&D expenditures. Policy implications are noted.

Original languageEnglish
Pages (from-to)147-159
Number of pages13
JournalJournal of Health Economics
Volume21
Issue number1
DOIs
StatePublished - 2002

Fingerprint

Health Expenditures
Health Care Costs
Technology
Delivery of Health Care
Elevators and Escalators
Economics
Health care costs
Cointegration analysis
Health care expenditures
Health
Real income
Technological change

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

Technology as a 'major driver' of health care costs : A cointegration analysis of the Newhouse conjecture. / Okunade, Albert A.; Murthy, Vasudeva N. R.

In: Journal of Health Economics, Vol. 21, No. 1, 2002, p. 147-159.

Research output: Contribution to journalArticle

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