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Geographic and dynamic heterogeneity of public pharmaceutical expenditure A regression model for per capita public pharmaceutical expenditure, based on aggregate data from fifty Spanish provinces is analyzed. In contrast to previous practice, the effects of determinants on pharmaceutical expenditure are allowed to be heterogeneous by years and provinces using temporally and geographically expanded coefficients. Considerable parametric heterogeneity over time as well as across provinces is found, even when residual dynamic heterogeneity and interdependency as well as residual spatial spillover is controlled for. Thus, the need for further evidence and development of modeling practice when analyzing large area behavior using small area data is demonstrated