Is Health a Necessity in Sub-Saharan Africa? An Investigation of Income-Elasticity of Health Expenditures In Rural Senegal

Investigating income-elasticity of health expenditures can provide insights into the extent of public involvement in the health sector and the need for co-financing schemes. Although this is particularly relevant in vulnerable countries, evidence from sub-Saharan Africa is lacking. The paper explores the relationship between permanent and current income and health expenditures. First, at the patient level, income-elasticity of health expenditures during the last medical contact with a qualified health provider is investigated. Second, household-level estimation of income-elasticity of household health expenditures is conducted to account for the healthcare use rate. The results suggest that health is a necessity good, which has methodological and policy implications. Copyright (c) 2014 John Wiley & Sons, Ltd.