Does intelligence affect health care expenditure? Evidence from a cross-country analysis

Abstract

Most of the literature on the determinants of health expenditure is focused on the relationship between health care expenditure and income. We investigate the interactive effect of income and intelligence on health expenditure, using data from 172 countries, over the period from 2009 to 2013. The results show that the income elasticity of health expenditure is greater than 1 but only if a nation's level of IQ score beyond a certain threshold (about 95), while for low-IQ nations, health care is a necessity. Moreover, various robustness checks largely support the robustness of our main findings.