Stochastic Convergence Analysis In Per Capita Health Expenditures for OECD Countries: Wavelet Unit Root Test Approach

Authors : Ahmet Koncak, Gökhan Konat, Havanur Ergün Tatar

Pages : 1-15

View : 97 | Download : 83

Publication Date : 2024-06-25

Article Type : Research Paper

Abstract :Abstract: Health is considered one of the essential factors in the growth and development of countries and the formation of human capital. Advances in the health sector have a positive effect on economic growth. With the developing technology and progress, it is seen that there have been severe increases in health expenditures in both developing and developed countries in recent years. Since investments in health expenditures contribute to the physical structure of the population, this situation brings with it an increase in productivity. For this reason, health expenditure convergence has recently become the focus of researchers in the economics literature. This study examined whether the per capita health expenditure of 21 OECD members converged to the OECD average. Stochastic convergence has been tested for the period 1975-2019 with the wavelet unit root test developed by Fan and Gencay (2010) as well as conventional unit root tests (ADF, PP and KPSS). When the wavelet unit root test results, which include both time and frequency domain information with better power characteristics than conventional tests, are examined, it is concluded that nine countries converge to the OECD average. Since health expenditures, which is one of the economic development indicators, are an essential factor for sustainable economic growth, it is an inevitable fact that if the convergence hypothesis of health expenditures is valid, it will positively affect economic growth.
Keywords : Birim Kök Testi, Zaman Serileri, Dalgacık, Sağlık Harcamaları, Yakınsama