Household income and health care expenditures in Mexico

Abstract

The purpose of this paper is to examine the determinants of household health expenditures in Mexico. Our analysis involves the estimation of household monetary health care expenditures, using the economic and demographic characteristics of the household as covariates. We pay particular attention to the impact of household income on health expenditures, estimating the elasticity of health care expenditures with respect to income for different income groups and according to health insurance status. For the empirical analysis, we use the Mexican National Survey of Income and Expenditures of 1989. Our principal findings show that monetary health expenditures by Mexican households are sensitive to changes in household income levels and that the group which is most responsive to changes in income levels is the lower-income uninsured group. This suggests that in times of economic crisis, these households reduce cash expenditures on health care by proportionately more than higher-income and insured households.