The Granger Causality Between Health Expenditure and Gross Domestic Product in OECD Countries

Abstract

The aim of this study is to reflect the causality relationship between the exchange ratio in gross domestic product (dGDP) and health expenditures per capita (HEPC) among OECD countries based on purchasing power parity in dollars through Granger causality test. Within this perspective, HEPC data of 26 OECD member countries between the years 1992 and 2014 and GDP exchange ratio between the periods 1992–1993 and 2014–2015 were analysed. As a result of the analysis, the relation between the exchange ratio in GDP and HEPC is unilateral in 9 countries and bilateral in 2 countries while there has not been any relation in 15 countries. There are strong relations between the revenues of countries and their health expenditures. The results from this study is considered to lead the health policy makers and planners in taking administrative decisions.