THE IMPACT OF SOCIOECONOMIC FACTORS ON PUBLIC HEALTH CARE EXPENDITURE IN ASEAN COUNTRIES

Abstract

This study focuses on the macroeconomic, environmental, and socioeconomic determinants that would bring an impact on the healthcare. The ASEAN countries' economic growth, carbon emissions, urban population, and energy consumption are hypothesized to be correlated with healthcare expenditure. This study aims to investigate the impact of each factor affecting healthcare expenditure in these six ASEAN countries. The study looks into six ASEAN countries, i.e. Indonesia, Philippines, Thailand, Malaysia, Singapore, and Brunei Darussalam for the period of 2010-2014. A panel data analysis was conducted to meet the objectives of this study. To test the stationarity of the data, panel unit root tests including Augmented Dickey-Fuller (ADF) test and Phillips-Perron (PP) test were conducted. Next, Poolability F-test, Hausman test and Breusch-Pagan Lagrange Multiplier test had been carried out in order to select the best estimation model out of the three models which are Pooled Ordinary Least Square (POLS), Fixed Effect Model (FEM) and Random Effect Model (REM). Both ADF test and PP test suggested that all the variables were in stationary at second differencing with trend and without trend at the significance level of 1%. The following results of Poolability F-test, Hausman test and Breusch-Pagan Lagrange Multiplier test revealed that REM is the best estimation model to be applied in this study. Based on the REM findings, there is a negative relationship between economic growth at 1% significant level and HE that does not reflect Wagner’s Law in the context of this study. The finding of an insignificant relationship between carbon emission and HE at 1% significant level also does not reflect the Social Capital Theory which suggests that poor environmental quality and subsequent health damages lead to higher government health spending. The conclusion of this study had inferred that both economic growth and urban population have a negative significant impact towards healthcare expenditure in countries where private healthcare services, especially those located in urban centres, play important roles in complementing public healthcare services in serving the population. Meanwhile, carbon emission and energy usage are found insignificant to healthcare expenditure.