Total expenditure elasticity of healthcare spending in Russia

Abstract

In this study we estimate the income elasticity of spending on different healthcare services and medication in Russia, taking into account the non-linear relationship between income level and expenditure. We employ the RLMS-HSE data, 2006-2017, to estimate the elasticities at household level. Our findings show these elasticities have not changed over the years. Additionally, we show that low-income and high-income households demonstrate different levels of elasticities, which is consistent with the fact that healthcare is less affordable for the poor. The study confirms that healthcare and medication are close to luxury level for low-income households and drugs are almost income inelastic for rich households. The results could help to reveal which services are the least affordable for the population.