The Granger causality between health expenditure and income in Southeast Asia economies

The objective of this study is to investigate the health-income relationship for the ASEAN-5 economies within the time series framework from 1970 to 2006. This study adopted the bounds testing approach to cointegration developed by Pesaran et al. (2001) to examine the presence of long run equilibrium relationship via the autoregressive distributed lag (ARDL) framework. The empirical evidence reveals that health expenditure and income are cointegrated for the case of Indonesia, Singapore and Thailand. On the contrary, for the case of Malaysia and the Philippines, the study found that these variables are not moving together in the long run. Apart from that, the bootstrap Granger causality tests results suggest that income Granger causes health expenditure for all the selected ASEAN countries, except Indonesia (neutral causality).