Ageing and health care expenditure in Malaysia

This study investigates the influence of health care expenditure on ageing population and life expectancy in Malaysia. The relationships between these variables are revealed in this study. The methods used to ascertain these relationships are; Augmented Dickey Fuller (ADF), Philips Perron (PP), Johansen Cointegration Approach, VECM model, and Granger Causality Test. Ageing is divided into three categories: young old, middle old, and old old. The study finds ageing and life expectancy to be determinants of health expenditure in Malaysia. Only young old, old old and life expectancy are significant and positively related to health expenditure while middle old is negative and not significant. The unidirectional causality was found from young old and middle old to health expenditure and the significant bi-directional causality is presence between health expenditure and life expectancy