LONG-TERM MODEL AND MONTE CARLO SIMULATION OF THE PUBLIC HEALTH EXPENDITURE IN BULGARIA

• Main Author: Nikolay Atanasov
• Format: Article
• Language: English
• Published: Peytchinski Publishing 2021-09-01
• Series: Journal of IMAB
• Subjects: health expenditure; monte carlo simulation; cointegration; health policy
• Online Access: https://www.journal-imab-bg.org/issues-2021/issue3/2021vol27-issue3-3911-3918.pdf

Purpose: The aim of the study is to build a long-term model and conduct a Monte Carlo simulation of the public health expenditure (PHE) of Bulgaria with the gross domestic product (GDP) as an independent variable. Material/Methods: Statistical models are used for modeling the long-term dependence between the macroeconomic dynamic rows, testing of hypotheses of stationarity (Augmented Dickey-Fuller tests), for serial autocorrelation and others. Results: There is a well-defined, statistically significant long-term relationship between public health expenditure and gross domestic product. The long-term model of health expenditure has an estimate of the cointegration constant of 1.023 (p-value < 0.05). Monte Carlo simulations are presented with 1 000, 2 000 and 3 000 experiments, generated based on the normal distribution of the input variable. Conclusions: In the period after the year 1990, a well-defined long-term relationship between public health expenditure and GDP exists. The Monte Carlo simulation can be regarded as a reliable instrument for studying the most likely fluctuations in health expenditure caused by the GDP.