Determinants of public health expenditure: some evidence from Indian states

Abstract

This study examines the evolution of public health expenditure in India. A panel data model is used to explain the main factors which affect public health expenditure in the period 1971 to 1991. The empirical results show that the key determinants in the explanation of the regional health expenditure are real state per capita income and literacy rate, while other structural demand variables such as the proportion of the state population over age 60, population per primary health care center and population per doctor are statistically insignificant factors. An income elasticity of 0.47 implies that health care is not a luxury good.