The income elasticity of demand for healthcare in Kazakhstan

Abstract

The study aims to understand out-of-pocket (OOP) healthcare expenditures in Kazakhstan. Ac- cording to the World Health Organization database expenditures as a percentage of total expendi- tures was 45.1% in 2014. This means that OOP health expenditures may bear a significant financial burden on the households. As the result, this study sets objectives to predict healthcare utilization rate and estimate income elasticities of demand for healthcare in Kazakhstan. The study implements two-part model as the main tool to construct income elasticities of demand for health goods and services. The results show that overall the healthcare is a necessity good for the entire population. Nevertheless, major subcategories of healthcare such as inpatient and out- patient services are more income sensitive rather than demand for pharmaceutical goods or dental services.