Econometric Analysis

Abstract: Expenditure on health care services currently accounts for an enormous proportion of annual GDP in most OECD countries. Yet, the effects of the aggregate factors that determine it, such as demographic composition of a country, federal health care provisions and national income itself are largely disputed. This study examines time series and fixed effects longitudinal estimates of these variables across the US, UK, Japan and Australia. Findings are indeed contentious regarding income elasticity and whether healthcare can be classified as a normal good or luxury good. Moreover, the increasing size of the aging population appears increase health care spending. In aggregate, the amount of public financing is negatively related to health care expenditure.

Econometric Analysis Notes

- The following are my own notes, sourced primarily from Wooldrige (2008), Kennedy (2003) and my own class notes. The notes in purple square brackets are the corresponding Stata (v10) code for the stated econometric technique. In order to use the code, one must have a basic understanding of the Stata econometric software package. Moreover, in order to follow the notes, one must have a basic understanding of econometric concepts.

General Econometric Tools

Ordinary Least Squares, Omitted Variable Bias and Multicollinearity

Heteroskedasticity and Autocorrelation

Panel Data

Endogenous Regressors

Binary Choice: LPM, Logit, Probit, Tobit

Useful Resources

http://wps.aw.com/aw_murray_economtrcs_1/37/9551/2445250.cw/index.html

http://fmwww.bc.edu/ec-c/f2009/228/ec22802.f2009.php

Applied Time Series Example

Applied Heteroskedasticity Example

UCLA Stata