Examining the Quantile Effects of Income Inequality, Relative Deprivation, and Modern Technologies on Health Expenditures in Iran

Sima  Safarzadeh; Lotfali  Agheli; Khashayar  Seyedshokri

Authors

Sima Safarzadeh Department of Health Economics, SR.C., Islamic Azad University, Tehran, Iran Author https://orcid.org/0000-0002-4082-1175
Lotfali Agheli Department of Economics, Faculty of Economics, Tarbiat Modares University, Tehran, Iran https://orcid.org/0000-0003-1043-346X
Khashayar Seyedshokri Department of Economics, CT.C., Islamic Azad University, Tehran, Iran Author https://orcid.org/0000-0003-1351-9314

Keywords:

Health Expenditures, Income Inequality, Relative Deprivation, Human Capital, Modern Technologies

Abstract

This study examines the quantile effects of income inequality, relative deprivation, and modern technologies on health expenditures in Iran during the period 1991–2024. In terms of its objective, the study is applied research, while in terms of its nature, it adopts a descriptive-analytical approach and falls within the category of ex post facto research. Quantile regression was employed to estimate the long-run relationships among the variables and analyze distributional effects, thereby allowing the effects of the explanatory variables to be examined across all quantiles of the health expenditure distribution. The dependent variable is government public expenditure on health, while the independent variables include income inequality, relative deprivation in human capital, human capital, the development of modern technologies (ICT), capital formation, employment, population, CO₂ emissions, and the COVID-19 crisis. The results of the stationarity and cointegration tests indicate that all variables become stationary after first differencing and that at least four long-run cointegrating relationships exist among the variables. The quantile regression findings demonstrate that income inequality and relative deprivation have positive and statistically significant effects on health expenditures, with these effects becoming stronger at higher quantiles. In contrast, modern technologies have a negative and statistically significant effect on health expenditures, such that a higher level of ICT development is associated with lower government health expenditures. Other control variables, including population, capital formation, employment, and CO₂ emissions, also exhibit heterogeneous effects on health expenditures. The findings indicate that income inequality and relative deprivation are important drivers of increased health expenditures, whereas the development of modern technologies can alleviate expenditure pressures by improving the efficiency of healthcare systems. These findings provide practical implications for economic and health policymakers, particularly in designing policies aimed at reducing inequality and enhancing productivity and efficiency in the health sector.

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