Monday, 10 November 2014

An update to my post about longevity and healthcare spending

A few days ago, I posted about the relationship between longevity and healthcare spending among developed countries, finding it to be negative. Scatterplots suggested that most of the variation in longevity across developed countries is between regions; citizens of East Asia and the Mediterranean appear to live longer than citizens of North West Europe and the former colonies. Here I check this intuition by running some simple regression models.

For the sake of brevity, I focus on healthy life expectancy since that is arguably the measure we should care more about. Rather than arbitrarily selecting advanced countries, I simply take all 33 countries with a healthy life expectancy of 70 or higher from the WHO database. This adds 8 more countries to my original sample of 25, namely: Andorra, Chile, Iceland, Luxembourg, Malta, Monaco, San Marino, and Slovenia. I group the countries into four regions: Northern Europe, the former colonies, the Mediterranean, and East Asia. In addition, I control for the percentage of the population older than 65, using figures from the World Bank and the CIA World Factbook.

The first table displays the results for total healthcare spending per capita (measured at PPP). The second displays the results for government healthcare spending per capita (also measured at PPP). In both cases, the effect of healthcare spending is non-significant in all three models; it does, however, switch from negative to positive when region is introduced. As expected, region explains a considerable proportion of the variation in longevity (~50%). East Asians live longest, followed by Mediterraneans, while Northern Europeans and the citizens of former colonies live shortest. Interestingly, percentage older than 64 doesn't account for the negative effect of healthcare spending on longevity.    

Incidentally, the results in the third column were practically identical when percentage older than 64 was omitted, as well as when the sample was restricted to the original 25 countries.

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