TY - JOUR
T1 - A nonlinear approach to testing the unit root null hypothesis
T2 - an application to international health expenditures
AU - Narayan, Paresh Kumar
AU - Popp, Stephan
N1 - Copyright:
Copyright 2011 Elsevier B.V., All rights reserved.
PY - 2012/1
Y1 - 2012/1
N2 - In this article, we examine the unit root null hypothesis for per capita total Health Expenditures (HEs), per capita private HEs and per capita publicHEs for 29 Organization for Economic Co-operation and Development (OECD) countries. The novelty of our work is that we use a new nonlinear unit root test that allows for one structural break in the data series. We find that for around 45% of the countries, we are able to reject the unit root hypothesis for each of the three HE series. Moreover, using Monte Carlo simulations, we show that our proposed unit root model has better size and power properties than the widely used Augmented Dickey-Fuller (ADF) and Lagrange Multiplier (LM) type tests.
AB - In this article, we examine the unit root null hypothesis for per capita total Health Expenditures (HEs), per capita private HEs and per capita publicHEs for 29 Organization for Economic Co-operation and Development (OECD) countries. The novelty of our work is that we use a new nonlinear unit root test that allows for one structural break in the data series. We find that for around 45% of the countries, we are able to reject the unit root hypothesis for each of the three HE series. Moreover, using Monte Carlo simulations, we show that our proposed unit root model has better size and power properties than the widely used Augmented Dickey-Fuller (ADF) and Lagrange Multiplier (LM) type tests.
UR - http://www.scopus.com/inward/record.url?scp=79961244292&partnerID=8YFLogxK
U2 - 10.1080/00036846.2010.500276
DO - 10.1080/00036846.2010.500276
M3 - Article
AN - SCOPUS:79961244292
SN - 0003-6846
VL - 44
SP - 163
EP - 175
JO - Applied Economics
JF - Applied Economics
IS - 2
ER -