Author/Authors :
Soleimani Movahed, Maryam Department of Health Economics - School of Health Management and Information Sciences - Iran University Of Medical Sciences - Tehran, Iran , Rezapour, Aziz Health Management and Economics Research center - Iran University of Medical Sciences - Tehran, Iran , Vahedi, Sajad Department of Health Care Management - School of Health - Ahvaz University of Medical Sciences - Ahvaz, Iran , Abolghasem Gorji, Hassan Department of Health Services Management - School of Health Management and Information Sciences - Iran University of Medical Sciences - Tehran, Iran , Bagherzadeh, Rafat Department of English Language - School of Health Management and Information Sciences - Iran University of Medical Sciences - Tehran, Iran , Nemati, Ali Department of Health Services Management - School of Health Management and Information Sciences - Iran University of Medical Sciences - Tehran, Iran , Nemati, Gholamreza Department of Economics - School of Administrative and Economic Sciences - Lorestan University - Khorramabad, Iran , Mohammad-pour, Saeed Health Management and Economics Research center - Iran University of Medical Sciences - Tehran, Iran
Abstract :
Pharmaceutical productions are recognized as an essential commodity in the economical
literature; therefore, an increase in their prices leads to an increase in the household budget.
Currently, about 15-20% of the entire health expenditure in Iran is allocated to the pharmaceutical
sector. This study aimed to investigate the effect of inflation and its uncertainty on inflation in
pharmaceutical prices in Iran. In this study, the monthly time series of consumer price index from
2001 to 2017 was used to calculate inflation uncertainty based on a generalized autoregressive
conditional heteroscedasticity model. Hylleberg-Engle-Granger-Yoo test was performed to
determine the stationary of the data. Feasibility tests were also used to explore the application of
Autoregressive conditional heteroscedasticity family models to these data. The causal relationship
between inflation uncertainty and inflation in the pharmaceutical sector was investigated using the
Granger causality test. A causal relationship was found between inflation and inflation uncertainty
at the 95% confidence interval for the monthly data during the study. It was revealed that Inflation
uncertainty did not affect the inflation in the pharmaceutical prices, but inflation can be a cause of
pharmaceutical inflation. Although inflation uncertainty has no association with pharmaceutical
inflation, it seems that it could affect pharmaceutical inflation through inflation in other sectors.
Therefore, adopting appropriate monetary policies aimed at controlling liquidity and inflation can
effectively control pharmaceutical prices.
Keywords :
EGARCH , Pharmaceutical Prices , Inflation Uncertainty , Inflation