Public-private Mix of Health Expenditure: A Political Economy and Quantitative Analysis

Canadian Journal of Economics 49(2) 2016, pp. 834-866

31 Pages Posted: 23 Feb 2021

See all articles by Shuyun May Li

Shuyun May Li

University of Melbourne

Solmaz Moslehi

Monash Business School

Siew Ling Yew

Monash University

Date Written: December 15, 2016

Abstract

This paper constructs a simple model to examine decisions on public and private health spending under majority voting. In the model, agents with heterogeneous incomes choose how much to consume and spend on health care and vote for public health expenditure. The health status of an agent is determined by a CES composite of public and private health expenditure. The existence and uniqueness of the voting equilibrium are established. A quantitative exercise reveals the importance of the relative effectiveness of public and private health expenditure and their substitutability in determining the public-private mix of health expenditure and in accounting for the observed differences across a sample of 22 advanced democratic countries.

Suggested Citation

Li, Shuyun May and Moslehi, Solmaz and Yew, Siew Ling, Public-private Mix of Health Expenditure: A Political Economy and Quantitative Analysis (December 15, 2016). Canadian Journal of Economics 49(2) 2016, pp. 834-866, Available at SSRN: https://ssrn.com/abstract=3749246

Shuyun May Li (Contact Author)

University of Melbourne ( email )

Melbourne, 3010
Australia

Solmaz Moslehi

Monash Business School ( email )

Wellington Road
Clayton, Victoria 3168
Australia

Siew Ling Yew

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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