What Drives Public Health Care Expenditures? Evidence from Pakistan

Abstract

This study is about to investigate the main factors affecting health care expenditure in Pakistan. For this purpose, annual data are put into ARDL framework. The time period of the data was 1990-2019. Firstly, data descriptive statistics are tested and found that the data are normally distributes. Secondly, unit root tests ADF and PP are employed and revealed that the variables are of mixed order of stationarity. After stationarity checking ARDL technique is used to test the long run relationship between the variables. Bound test confirm the existence of long run relationship in variables of the model. Long run and short variables are estimated and found that in the long-run all the variables are statistically significant. The impact of GDPG and CO2 are positive while the impact of INF and PG is negative. Diagnostic tests are i.e. serial correlation, heteroscedasticity, normality and stability of the parameters. No serious econometric problem is reported by the diagnostic tests.