Abstract
The studies on the demand for healthcare in low- and middle-income countries rarely take into consideration the fact that many people spend their income on self-treatment and professional treatment. The estimation of the income elasticity of demand for self-treatment and professional treatment can show a more precise picture of the affordability of professional care. This paper contributes to the discussion around estimates of income elasticity of health spending and discussion whether professional care and self-treatment are close to a luxury good and inferior good respectively in a middle-income country. We apply the switching regression model to explain the choice between self-treatment and professional healthcare via estimates of the income elasticity. Estimates are made with the use of the Russian Longitudinal Monitoring Survey — Higher School of Economics (RLMS-HSE), a nationally representative survey. While individual expenditure on professional treatment is higher than that on self-treatment, our estimates show that expenses on professional treatment can be income inelastic except when spending on medicines prescribed by a physician that are elastic. The results also indicate that cost of self-treatment is income elastic. In all cases, the considered income elasticities are statistically insignificant between professional and self-treatment.
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Data Availability
The «Russia Longitudinal Monitoring Survey, RLMS-HSE» (RLMS-HSE), conducted by the National Research University « Higher School of Economics» and OOO «Demoscope» together with Carolina Population Center, the University of North Carolina at Chapel Hill and the Institute of Sociology the Russian Academy of Sciences. RLMS-HSE is available on the web-site: http://www.cpc.unc.edu/projects/rlms-hse.
Notes
There is no hard and fast way to measure the self-treatment phenomenon at the country level and different questionnaires show different results. Because of this these numbers cannot be compared with one another and serve a purpose to illustrate how popular self-treatment is.
There are some exceptions when the universal health coverage can reimburse spending on medication, see (Popovich et al., 2011) ‘Healthcare system in Russia’ paragraph for details.
The “Russia Longitudinal Monitoring Survey, RLMS-HSE” (RLMS-HSE), conducted by the National Research University «Higher School of Economics» and OOO «Demoscope» together with Carolina Population Center, the University of North Carolina at Chapel Hill and the Institute of Sociology the Russian Academy of Sciences; RLMS-HSE web sites: http://www.cpc.unc.edu/projects/rlms-hse.
The first question was, “Have you had any health problems in the last 30 days?” If respondent answered “No”, he was asked, “Perhaps in the last 30 days you did not feel well, for example, had a headache, sore throat, or toothache, or had a cold or upset stomach, a slightly elevated temperature, or a burn, injury, or scratch?”
We use ‘home treatment’ instead of ‘self-treatment’ in order to be consistent with the original phrasing in the questionnaire; in the remaining part of this article we use self-treatment to avoid confusion.
We use the lagged value of income to reduce its endogeneity concerned with health problems observed in the period t.
with a few exemptions, see (Popovich et al., 2011) for details.
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Funding
This research was supported by a Russian Science Foundation grant, project No. 20-18-00307, “Health of Nation: A Multidimensional Analysis of Health, Health Inequality and Health-Related Quality of Life”.
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Andrey Aistov prepared the dataset and estimated the models; Ekateria Aleksandrova and Eugene Zazdravnykh together wrote the text of this manuscript. Ekateria Aleksandrova mainly contributed to the Discussion and Conclusions part and Introduction, the other paragraphs mainly written by Eugene Zazdravnykh.
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z,2 Eugene Zazdravnykh, HSE University; Graduate School of Management, St. Petersburg University, Saint Petersburg, Russia; E-mail: ezazdravnykh@hse.ru;
y,3 Andrey Aistov, HSE University, Niznhy Novgorod, Russia; E-mail: aaistov@hse.ru;
x,4 Ekaterina Aleksandrova, Sechenov University, Moscow, Russia; E-mail: aleksandrova_e_a_1@staff.sechenov.ru.
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Zazdravnykh, E., Aistov, A. & Aleksandrova, E. Total expenditure elasticity of spending on self-treatment and professional healthcare: a case of Russia. Int J Health Econ Manag. 24, 81–105 (2024). https://doi.org/10.1007/s10754-023-09353-0
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DOI: https://doi.org/10.1007/s10754-023-09353-0