Abstract
Background
This commentary assesses critically the published article in the Health Economics Review. 2020; 10 (1), 1–9. It explains the effects of health expenditure on infant mortality in sub-Saharan Africa using a panel data analysis (i.e. random effects) over the year 2000–2015 extracted from the World Bank Development Indicators. The paper is well written and deserve careful attention.
Main text
The main reasons for inaccurate estimates observed in this paper are due to endogeneity issue with random effects panel estimators. It occurs when two or more variables simultaneously affect/cause each other. In this paper, the presence of endogeneity bias (i.e. education, health, health care expenditures and real GDP per capita variables) and its omitted variable bias leads to inaccurate estimates and conclusion. Random effects model require strict exogeneity of regressors. Moreover, frequentist/classic estimation (i.e. random effects) relies on sampling size and likelihood of the data in a specified model without considering other kinds of uncertainty.
Conclusion
This comment argues future studies on health expenditures versus health outcomes (i.e. infant, under-five and neonates mortality) to use either dynamic panel (i.e. system Generalized Method of Moments, GMM) to control endogeneity issues among health (infant or neonates mortality), GDP per capita, education and health expenditures variables or adopting Bayesian framework to adjust uncertainty (i.e. confounding, measurement errors and endogeneity of variables) within a range of probability distribution.
THE EFFECTS OF ECONOMIC VARIABLES ON HEALTH EXPENDITURE PER CAPITA AND LIFE EXPECTANCY AT BIRTH: PANEL DATA ANALYSIS FOR MIDDLE TOP INCOME COUNTRIES
