Introduction: During the last few decades, healthcare expenditures (HCEs) have increased significantly in Iran and throughout the world. Understanding the determinants of such increases is essential to health policymakers in finding the best policies to manage healthcare costs. This study aimed to determine the impact of some of the key explanatory variables on household healthcare expenditures across the provinces of Iran. 

Methods: A panel data econometric model was used to determine the main factors that affected household healthcare expenditures (HHCEs) across the provinces of Iran from March 21, 2006 to February 19, 2013. The data on household healthcare expenditures per capita, number of physicians per 10,000 population, the degree of urbanization, the proportion of the population that was 65 or older, household income per capita, and literacy rate were obtained from the Household Expenditure and Income Survey (HEIS) data in the Statistical Center of Iran. F-Limer and Hausman tests were used to choose the panel data, and Stata V.12 was used to analyze the data. 

Results: Our findings indicated that income per capita, physicians per 10,000 population, and the degree of urbanization had significant impacts on healthcare expenditures. Also, the results of the study showed the elasticity of income, physicians, urbanization, proportion of the population 65 or older, and the literacy rate were 0.25 (p < 0.002), 0.37 (p < 0.001), 5.01 (p < 0.001), -0.1 (p < 0.73), and -1.02 (p < 0.082), respectively. 

Conclusion: The results of the study indicated that the income elasticity of healthcare expenditures was less than 1; health expenditures were considered to be a “necessity good” across the provinces of Iran during the period that was studied. In addition, there were some other factors that affected healthcare expenditures that were not considered in the study, such as the advancement of new technology and the costs of dying. However, it is recommended that future research examine the effect of these factors on HCEs in Iran.


Keywords: healthcare expenditures, panel data estimation, income elasticity, Iran
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