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  • Medical Expenditures and Health Status in Australia: A Story of Increasing or Decreasing Returns?

    Author(s)
    B. Connelly, Luke
    P. Doessel, Darrel
    Griffith University Author(s)
    Doessel, Darrel P.
    Year published
    2004
    Metadata
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    Abstract
    We use a three-equation model to estimate a health production function for Australia using population data for 1996. Working at the level of the Statistical Local Area (n= 1335) we match (i) data on private practice medical services (derived from the Medicare scheme), (ii) mortality data derived from the de-identified unit records produced by the Australian Bureau of Statistics (ABS), and (iii) social and economic data from the Australian Census of Population and Housing (ABS 1997). We detect strong and statistically significant positive marginal effects of medical expenditure on health status as well as increasing returns. ...
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    We use a three-equation model to estimate a health production function for Australia using population data for 1996. Working at the level of the Statistical Local Area (n= 1335) we match (i) data on private practice medical services (derived from the Medicare scheme), (ii) mortality data derived from the de-identified unit records produced by the Australian Bureau of Statistics (ABS), and (iii) social and economic data from the Australian Census of Population and Housing (ABS 1997). We detect strong and statistically significant positive marginal effects of medical expenditure on health status as well as increasing returns. These findings are remarkably different from those of US health production studies, which have tended to lend support to the hypothesis of 'flat-of-the-curve (that is, zero marginal product) medicine'. Moreover, our conclusions are in stark contrast to those produced by Richardson and Peacock (2003, p. 6), who have argued that their econometric work indicates that 'an increase in the [Australian] doctor supply is associated with increasing mortality'.
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    Journal Title
    Australian Economic Review
    Volume
    37
    Issue
    1
    Publisher URI
    http://www.ssrn.com/
    DOI
    https://doi.org/10.1111/j.1467-8462.2004.00305.x
    Subject
    Economics
    Publication URI
    http://hdl.handle.net/10072/27379
    Collection
    • Journal articles

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