ΤΗΕ HEALTH SECTOR ΙΝ ΤΗΕ E.U. COUNTRIES. Α COMPARATIVE ECONOMETRIC ANALYSIS. Abstract

ΕΠΙΘΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχο ς 2 (2002), 97-126 Νικόλαος Δριτοάκης Αναπληρωτής Κοβηyητήc; Τμήματος Εφηρμοσμένης Πληροφορικής, Πονεπιοτημίου Μακεδονίας ΤΗΕ HEALTH SECTOR ΙΝ ΤΗΕ E.U. COUNTRIES. Α COMPARATIVE ECONOMETRIC ANALYSIS. Abstract This paper is an effort to inνe stigate the factors that affect the health sector in the E.U. member-states. The model used includes a system offour structural equations and two identities. ΑΙΙ equations are exponential and they are conνerted in log-linear form in order to be estimated. The analysis of the equations is part of a macro-economic model. The estirήation of the model was carried out using the two stage least squares method, obtaining data from 1960 to 2000. Monetary νariables are ίη ECU at 1980 prices. The aνerage leνel of salaries, the aνerage cost of hospital beds and the gross domestic product are used as explanatory νariables. We test estimated model if it can reproduce reality, using the dynamic simulation method. Finally, the simulated model is used for experimenting on the application of economic policies, which are based on changes on the explanatory νariables. Περίληψη Η εργασία αυτή αποτ ελεί μια προσπάθεια διερεύνησης των παραγόντων που επηρεάζουν τον τομέα της υγείας των χωρών μελών στην Ευρωπαϊκή Ένωση. Το υπόδειγμα που χρησιμοποιείται περιλαμβάνει ένα σύστημα από τέσσερις διαρθρωτικές συναρτήσεις και δύο ταυτότητες. Όλες οι συναρτήσεις είναι εκθετικές και για λόγους εκτίμησης τις μετατρέπουμε στη λογαριθμική τους μορφή ώστε να γίνουν γραμμικές. Η ανάλυση των συναρτήσεων είναι μέρος ενός μακρο-οικονομικού υποδείγματος. Η εκτίμηση του υποδείγματος πραγματοποιήθηκε με τη μέθοδο των ελαχίστων τετραγώνων σε δύο στάδια χρησιμοποιώντας στοιχεία από το 1960 έως και το 1993. Οι νομισματικές μεταβλητές είναι σε ECU και σε σταθερές τιμές του έτους 1980. Ω ς εξωγενείς μεταβλητές χρησιμοποιούνται το μέσο επίπεδο των μισθών, το μέσο κόστος των νοσοκο. μειακών κρεβατιών και το ακαθάριστο εθνικό προϊόν. Το εκτ ιμημ ένο υπόδε ιγμα ελέγχεται κατά πόσο μπορεί να αναπαράγει την πραγματικότητα με τη μέθο δο της δυναμικής προσομοίωσης. Τέλος, το προσομοιωμένο υπόδε ιγμα χρησιμοποιείται σε πειραματισμούς εφαρμογής οικονομικών πολιτικών, οι οποίες βασίζονται σε μεταβολές των εξωγενών μεταβλητών. 97

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχος 2 (2002), 97-126 1. Introduction 98 After World War 11, in most EU countries there has been a raise in health care resources. Α peculiar form of programming appeared, which could be described as «excess - supply programming». This form of programming aimed at a constant raise of the health care resources in relation to the population. Thus, many new hospitals, university medical schools, schools for nurses and health care centers were created, demanding new staff, new buildings, new facilities, new technology, thereby, resulting in an exponential growth of health care resources in most European countries. The 60's and the first 3 years of the 70's were marked by a significant economical growth which led to an equally substantial raise of social expenses and provisions. During the period 1960-1973, the gross domestic product (GDP) of the EU countries was increasing by 18% approximately per annum (in current prices) or 8% per annum (in constant prices). Respectively, during the same period, inflation and unemployment were at a low level and so this economic growth created new labor opportunities and provided the EU countries with a chance to finance an expansion of social securities. Ιη 1974 and 1975, we had to face the first financial depression, due to the raise of the oil prices (first oil shock) which initiated a chain - inflationary process in most EU countries. During the years 1976, 1977 and 1978 there was a first partial recovery, which unfortunately didn't last long, because a new increase of the oil prices (second oil shock) in 1979 and 1980 started a new inflationary process, accompanied by high unemployment and underemployment rates. As a result of the second financial depression, there was a significant decrease in the rate of economical development (negative development rate ), which led to a substantial decrease of health care resources and social provisions. Subsequently, a new programming philosophy was established, which concluded that an excess supply of medical staff and beds, rather creates more social and financial problems, than serves as an aid to health care. New principles of programming have been set, aiming for clinical effectiveness, financial efficiency and social justice. It has been noted that, in order to satisfy these principles, a more efficient conjunction and organization of primary, secondary and tertiary health care services must be achieved. lt is certain that every EU member has it's own particularities. Α future research should determine the existing demographic, endemiologic, social, economical, and cultural differences. The magnitude of the health care and social needs should be assessed, and according to that, an allocation of health care resources should be made. Additionally, future researchers should study productivity and the possibility to substitute certain resources and health care systems by others, that might lead to a more efficient and socially just health care resource allocation. Ιη conclusion, both the programming and the health care resource

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 allocation (at an EU level) should be based οη a dynamic development model, which would take into consideration the diachronic progress of various values affecting the health care sector. Ιη recent years, matters concerning public health have attracted a lot of publicity. The basic parameter that is taken into account is respect for scientific data resulting from the modern field of economic science known as human resources economics, a part of which is health economics. Health economics analyzes, draws conclusions and offers scientific solutions to critical problems in the design and implementation of policies concerning health topics. (Cooper and Culyer 1973, Cullis and West 1979, Rosko and Broyles 1988). lt has been observed that in all European countries public expenditure for health has been increasing in time more than their GDP (Dritsakis and Sari 1998, Gerdham and all 1998, 2001). This happens because the increase in GDP of thw various countries is accompanied with the increase of the citizens' desire and demand for better quality of health - care services. Although, the aim of each European state is to improve the health of their citizens, different policies have been exercised by different states. Not all policies have succeeded. As Iiterature suggests, even countries as Great Britain have not managed to attain their aim besides all the reformation and reorganization attempts for the national health system (N.H.S). Many researchers (Joseph 1971, Grossman 1972, Lavers 1983, Duan and Manning 1983, Manning and Newhouse 1987, McCool and Κiker 1994) have occasionally dealt with the demand for health services. The purpose of all these projects was to investigate the effects of the variables which determine the demand for health services. This project aims to construct an econometric model in the health sector for E.U. member - states, studying the basic variables linked to demand for health services on a macro-economic level, in order to draw helpful conclusions, that would be useful for amore effective policy about the development of the health sector. Part 2 of this project is a presentation of the model specification that is used as an analytical tool of the equations in health sector. This model's estimates and their significance are discussed ίη part 3. Part 4 deals with the predictive ability and sensitivity controls of the dynamic simulation model. Finally, part 5 summarizes the basic conclusions of this paper. 2. Theoretical Framework-Model Specification Constructing the model, we are based on economic theory, data and studies that have been conducted in the health sector (Feldstein 1973, Gaag 1978, Yett and Drabek 1979, Duru and Paelink 1990, Karatzas 1992, Olsen 1993, Saez and Murillo 1994, Dritsakis and Papanastasiou 1995, Vita 1995, Milne and Molana 1996, Huttin 1997), in order to estimate the model. 99

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχος 2 (2002), 97-126 Labour demand function: Lt = Α elt WRtal Nta2 Lt-la3 where: Α, 1, aι, az, a3 are parameters for estimation. L = Number of workers in the health sector. WR = Average level of salaries. Ν = Health services. a) Parameter Α has a positive sign. b) Parameter 1 can have positive or negative values. c) Parameter al, which is the elasticity of the demand for labour in relation to the average level of salaries, is negatively signed, parameter a2, which is the elasticity of demand for labour with respect to health services, is positively signed and parameter a3, which is the elasticity of the demand for labour with respect to the demand for labour ίη the previous year and can be assigned values between Ο and 1. The equation ίη the log-linear form is: lnlt = ΙηΑ +lt + aιlnwrt + azlnnt + a3lt-l.where aι <Ο, az>o and O<a3<l the demand for labour in the health sector depends οη the following factors: The average level of salaries (WR): The higher the average level of salaries, the lower the demand for labour. The health services (Ν): The higher the health services, the higher the demand for labour. The demand for labour ίη the previous year (4-ι): The demand for labour in one period depends οη the demand for labour in the previous period. Hospital beds demand function: (1) (2) 100 Kt = Β emt BRtbl Ntb2 Kt.ιb3 where: Β, m, bι, bz, b3 are parameters for estimation. Κ = Number of hospital beds. BR = Average cost of hospital beds. Ν = Health services. a) Parameter Β is posistively signed. b) Parameter m takes positive or negative values. c) Parameter bl, which is the elasticity of demand for hospital beds in relation to the average cost of hospital beds, takes a negative value, parameter b2, which is the elasticity of demand for hospital beds with respect to health services, is assigned positive values, and parameter (3)

NIKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 b3, which is the elasticity of demand for hospital beds with respect to the demand for hospital beds ίη the previous period, is assigned values between Ο and 1. The log-iinear form of the equation is: lnkt = ΙηΒ + mt + bιlnbrt + b2lnnt + b3lnkt-l (4) where bι<ο, b2>0 and O<b3<l the demand for hospital beds depends οη the following factors: The average cost of hospital beds (BR): The higher the average cost of hospital beds, the lower the demand for them. Health services (Ν): The higher the level of health services, the higher the demand for hospital beds. The demand for hospital beds ίη the previous year (Κt-ι): The demand for hospital beds in one period depends οη the demand for hospital beds in the previous period. Investment function: lt = C ent Kt-lcl GDPtc2 lt-lc3 where: C, η, cι, c2, c3 are parameters for estimation 1 = Investments in the health sector. Κ = Number of hospital beds. GDP = Gross domestic product. a) Parameter C is positively signed. b) Parameter is assigned positive or negative values. c) Parameter c1, which is the elasticity of investments ίη the health with respect η to the number of hospital beds of the previous period, is assigned a negative value, parameter c2, which is the elasticity of investments with respect to the gross domestic product is positively signed, and parameter c3, which is the elasticity of investments with respect to the investments of the previous year, is assigned values between Ο and 1. The log-linear form of the equation is (5) Inlt = lnc + nt + cιlnkt-1 + c2lngdpt + c3lnlt-l where: cι<ο, c2>0 and O<c3<l investments ίη the health sector depend οη the following factors: (6) The number of hospital beds of the previous period (Κt. 1 ): The higher the number of hospital beds, the lower the investments ίη the health sector, given that the existing level of the number of hospital beds discourages new investments. 101

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙΘΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχος 2 (2002), 97-126 The gross domestic product (GDP): As the gross domestic product of an economy increases, the economy's investments, and mo,re specifically investments in the health sector respectively. Investments of the previous year (Ιt.ι): Investments in the health sector in one period depend οη investments in the previous period. Health services demand function: Nt = D eft GDPtdι PRtd2 Nt-Id3 (7) where: D, f; dι, d2, d3 are parameters for estimate. Ν = Health services. GDP = Gross domestic product. PR = Average cost of health services. a) Parameter D is positively signed. b) Parameter f may be negatively or positively signed. c) Parameter d 1, which is the elasticity of demand for health services, with respect to the gross domestic product is positively signed, parameter d2, which is the elasticity of demand for health services with respect to the average cost of health services is negatively signed and parameter d3, which is the elasticity of demand for health services with respect to the demand for health services in the previous period is assigned values between Ο and 1. The log-linear equation form is: lnnt = lnd + ft + dιlngdpt + d2lnprt + d3lnnt-i where: dι>ο, d2<0, and O<d3<l that is, the demand for health services depends οη the following factors: The gross domestic product (GDP): As the gross domestic product of an economy increase, the demand for health services increases respectively. The average cost of health services (PR): As the average cost of health services increases, the demand for health services decreases respectively. The demand for health services in the previous period (Νt-ι): The demand for health services in one period depends οη the demand for health services in the previous period. ldentities: The model is completed by the introduction of the following identities: Total Cost: Ct = WRt. Lt + BRt. Kt Average cost of health services: PRt = Ct / Nt (8) 102

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 3. Empirical Results The model of the four simultaneous equations and the two identities was estimated by the least squares method ίη two stages (2SLS), expressed ίη logarithmic form, using annual data concerning the period 1960-1993 and the microfit 3.0 software package. The exogenous variables that are used are the following: The average salaries level, the average cost of hospital beds, and the gross domestic product. The main sources of data were European Economy and the Organisation for Economic Cooperation and Development. The variables that are used are given below: L WR Ν κ BR Ι GDP= PR c The number of workers ίη the health sector. The average salary in the health sector. The hea\th services. The number of hospital beds. The average cost of hospital bed. Investment ίη the health sector. The gross domestic product. The average cost per health services. Total cost. Time trend. The labour demand elasticities of salary. The labour demand elasticities of hea\th services. The partial adjustment coefficient. The hospital beds demand elasticities of the average cost of hospital bed. The hospital beds demand elasticities of health services. The partial adjustment coefficient. The investment e\asticities of the existing leve\ of beds in previous year. The investment elasticities of G.D.P. The investment elasticities of past investment. The hea\th services demand elasticities of G.D.P. The hea\th servoces demand elasticities of average cost per health services. The partial adjustment coefficient. The discussion in the preceding section is concentrated οη the relationship between each dependent variable and its explanatory variables. The model however, will be estimated simultaneously, since such a procedure accounts for the interactions among the endogenous variables ( Thei\ 1971, Johnston 1972, Pindyck and Rubinfeld 1986, Green 1990). For this purpose we use the 2SLS method. The estimated equations along with the diagnostic test statistics are shown ίη the following tables 1-8 (Appendix 1) where: 103

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙΒΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τ εύχος 2 (2002), 97-126 Α:Χ2(1) Β:Χ2(1) C:X2(2) D:X2(1) R2 F(i,j) ( ) [ ] = = Lagrange multiplier test of residual serial correlation. Ramsey's RESET test for the functional form mispecification Bera-Jarque normality test based οη skewness and kurtosis of the residuals. Heteroskedasticty test Coefficient of determination adjusted for the degrees of freedom. F-Statistic denotes the t-values denotes the prob. levels 4. The simulated model The forecasting behaviour of the model estimated ίη the previous section has been tested by performing dynamic simulations. Tables 9 and 10, where: r correlation coefficient between actual and predicted values. RC regression coefficient of actual variables οη predicted values. U Theil's index. UM Fraction of errors due to bias. US Fraction of errors due to different variation. UC Fraction of error due to different covariance, present the means of the dynamic simulation indices with respect to the 15 members States and the six equations of each model respectively. From these tables, we conclude that the model can be used ίη order to make predictions. Table 9 - Means of the dependent variables of dynamic simulation indices along the 15 member states VAR. r RC u UM us uc L 0,976(0,004) 1,042(0,031) 0,003(0,001) 0,025(0,007) 0,024(0,006) 0,948(0,009) κ 0,952(0,012) 0,990(0,040) 0,001(0,000) 0,024(0,008) 0,039(0,007) 0,938(0,010) 1 0,939(0,017) 0,977(0,025) 0,006(0,003) 0,017(0,006) 0,040(0,012) 0,944(0,013) Ν 0,977(0,018) 0,978(0,022) 0,000(0,000) 0,032(0,009) 0,021(0,005) 0,950(0,010) COST 0,993(0,004) 1,019(0,013) 0,001(0,000) 0,023(0,005) 0,044(0,012) 0,934(0,013) PR 0,992(0,006) 1,026(0,011) 0,001(0,000) 0,020(0,005) 0,039(0,014) 0,941(0,014) Standard errors are given in parentheses. 104

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 Table 10 - Means of dynamic simulation indices along the six equations for each-member state COUN r RC u UM us uc /' Β. 0,976(0,002) 1,016(0,006) 0,001(0,000) 0,008(0,004) 0,032(0,013) 0,949(0,012) D.M. 0,954(0,023) 1,049(0,023) 0,002(0,001) 0,040(0,011) 0,018(0,007) 0,941(0,009) F. 0,970(0,014) 0,991(0,024) 0,003(0,001) 0,027(0,010) 0,020(0,007) 0,955(0,016) D. 0,989(0,004) 1,005(0:028) 0,000(0,000) 0,010(0,003) 0,030(0,006) 0,958(0,008) GR. 0,944(0,028) 0,992(0,015) 0,001(0,000) 0,027(0,012) 0,019(0,006) 0,950(0,017) IRL. 0,988(0,003) 1,008(0,006) 0,001(0,000) 0,010(0,005) 0,025(0,009) 0,959(0,008) 1. 0,984(0,013) 0,994(0,013) 0,006(0,005) 0,006(0,002) 0,058(0,026) 0,935(0,024) ι. 0,962(0,024) 0,945(0,030) 0,003(0,002) 0,014(0,007) 0,025(0,009) 0,958(0,014) NL. 0,988(0,004) 1,105(0,025) 0,002(0,001) 0,038(0,009) 0,041(0,011) 0,922(0,007) Ρ. 0,954(0,020) 0,930(0,068) 0,003(0,002) 0,023(0,010) 0,055(0,026) 0,927(0,023) s. 0,980(0,008) 1,051(0,011) 0,002(0,001) 0,035(0,007) 0,067(0,010) 0,891(0,013) G.B. 0,949(0,021) 1,038(0,071) 0,003(0,002) 0,034(0,011) 0,023(0,008) 0,943(0,008) Α. 0,994(0,003) 1,003(0,017) 0,000(0,000) 0,011(0,002) 0,017(0,005) 0,950(0,009) FIN. 0,995(0,011) 1,006(0,005) 0,001(0,000) 0,014(0,001) 0,021(0,010) 0,941(0,007) s.w. 0,961(0,021) 1,073(0,016) 0,003(0,001) 0,029(0,002) 0,047(0,012) 0,950(0,010) Standard errors are given ίη parentheses. The sensitivity of the simulated model to various economic policies has been investigated with the use of dynamic multipliers for this reason, tables 11-22 (Appendix 2) show the values of the dynamic multipliers for a 5% increase ίη the exogenous variables of salaries and cost of beds, for the first five years after the initial disturbance of the economic policy instruments. Before proceeding with the conclusions of this paper, ίη the next section, some remarks refering to the dynamic multipliers, are presented ίη tables 11-22 (Appendix 2) and ίη diagrams 1-12 (Appendix 3) respectively above: (1) Generally, the multipliers take their highest value, positive or negative ίη the first period after the shock. (2) Ιη most cases, the multipliers converge to their equilibrium levels after the first or second period. (3) Αη increase ίη salaries, decreases ίη the short-run the demand for labour, the number of beds and health services and increases the total cost and the cost of bed occupancy and generally affect a little 105

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχος 2 (2002), 97-126 investment. However, ίη the long-run an increase in salaries has an opposite effect οη all variables, except investment and health services. ( 4) Απ increase ίη the cost of hospital beds affects ίη the same way the variables as ίη (3) above, although the absolute values of the changes differ considerably. Ιη the long-run there is a decrease in the number of workers, beds and health services, and an increase in investment, total cost and cost per bed occupancy. 5. Concluding Remarks The analysis in the previous sections can be summarized as follows: Α. Comparative analysis of the estimated model. a) Analysίs of the labour demand functίon. All the countries members of the E.U show inelasticities ίη work as far as the salary is concerned and elasticities as far as health services are also concerned (except for Luxembourg (L)). With respect to the partial adjustment coefficient we note here that Ireland (IRL) has the smallest coefficient and Portugal (Ρ) has the largest. b) Analysίs of the hospίtal beds' demand functίon. All the countries show inelasticities ίη demand of hospital beds according to the cost of hospital bed. According to the elasticity ίη the demand of beds, as far as health services are concerned, are devided ίη elastic (like Belgium (BEL), Denmark (D.M), France (F), Italy (1), Spain (S) and Sweden (SW)), and inelastic (like Germany (D), Greece GR), Ireland (IRL), Luxembourg (L), Netherlands (NL), Portugal (Ρ), G. Britain (G.B), Austria (Α) and Finland (FIN)). With respect to the partial adjustment coefficient we note here that Spain (S) has the smallest coefficient and Belgium (BEL) has the largest. c) Investment functίon analysίs. The countries where the investments are inelastic according to beds are Belgium (BEL), Denmark (D.M), Germany (D), Greece (GR), Ireland (IRL), Portugal (Ρ), Austria (Α), and Sweden (SW) and elastic like France (F), Italy (Ι), Luxembourg (L), Netherlands (NL), Spain (S), G. Britain (G.B) and Finland (FIN). The countries where the investments are inelastic according to G.D.P are Belgium (BEL), France (F), Germany (D), Greece (GR), Luxembourg (L), Netherlands (NL), Portugal (Ρ), Finland (FIN), and Sweden (SW) and elastic are the countries, Denmark (D.M), Ireland (IRL), Italy (Ι), Spain (S), G. Britain (G.B) and Austria (Α). With respect to the partial adjustment coefficient we note here that Ireland (IRL) has the smallest coefficient and Portugal (Ρ) has the largest. 106 d) Health servίces' demand functίon analysίs. ΑΙΙ the countries of the E.U are inelastic ίη the demand of health

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 services according to the G.D.P, and the cost ofbed occupancy. With respect to the partial adjustment coefficient we note here that Sweden (SW) has the smallest coefficient and Denmark (D.M) has the largest. Β. Comparative analysis of the economic policy's application for the first five years. a) Analysίs of the salarίes' change. The application of the particular policy in the fifteen economies causes a decrease in labour of all the countries of E.U. Α raise of 5% in salaries has the greatest negative impact οη France(F) and the lowest οη Luxembourg (L). Α 5% raise in salaries decreases hospital beds in all the E.U countries. More specifically, Portugal (Ρ) is mostly affected, and οη the contrary, Luxemburg (L) is least affected. Α 5% raise of saiaries increases investments in the E.U countries. The highest increase of investments took place in Germany (D) and the iowest in Ireland (IRL). The health services decrease ίη the following countries: Belgium (BEL), Denmark (D.M), Germany (D), Ireland (IRL), Italy (1), Luxembourg (L), Portugal (Ρ), G. Britain (G.B), Austria (Α) and Sweden (SW). Οη the other hand, there is an increase in these countries, France (F), Greece (GR), Netherlands (NL), Spain (S) and Finland (FIN). The total cost raises in Denmark (D.M), Germany D), lreland (IRL), ltaly (Ι), Luxembourg (L), Portugal (Ρ), Spain (S), G. Britain (G.B), and Austria (Α), while it falls ίη Belgium (BEL), France (F), Greece (GR), Netherlands (NL), Finland (FIN) and Sweden (SW). The cost of bed occupacy increases in Denmark (D.M), Germany (D), Ireland (IRL), Luxembourg (L), Portugal (Ρ), G. Britain (G.B), Austria (Α), Finland (FIN) and Sweden (SW) while it falls in Belgium (BEL), France (F), Greece (GR), Italy (1), Netherlands (NL), and Spain (S). b) Analysίs of change ίη the cost of hospίtal beds. The application of this economical policy ίη the countries of the E.U causes a decrease of labour in all of them. The highest decrease was observed in Portugal (Ρ) and the lowest in lreland (IRL). The hospital beds became less in all the countries of the E.U, especially in Luxembourg (L) whereas the lowest was in Italy (1). The investments increase in all the countries of E.U per 5% in the cost of hospital beds taking the greatest value in G. Britain (G.B) and the lowest in Ireland (IRL). The health services worsen in all the countries which are members of the E.U. This occurs at most ίη Portugal (Ρ) and at least in lreland (IRL). 107

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύχος 2 (2002), 97-126 Total amount of cost increases in all the countries of E.U with the greatest increase in Italy (1) and the smallest in Finland (FIN). The cost of bed occupacy increases in all the countries of E.U with the highest increase in Portugal (Ρ) and the lowest in Austria (Α). Finally, the basic results of this paper can also be summarized in the followings: (1) Α policy which increases the salaries of those working in the health sector, not only decreases the demand for workers in health but also reduces the demand for hospital beds. (2) Α policy which increases the cost of hospital bed has the same results as above. (3) Since health is considered to be a«social good» with inelastic demand, a decrease in the number of workers and beds respectively, in the health sector, does not decrease investments. Οη the contrary, the supply of health services is intensified by an increase in the levels of investment. Therefore, it is considered to be a substitution between labour and capital. (4) From the standpoint of citizens, an increase in the current cost of health services decreases the demand of health services in the shortrun. However, very soon the citizens return to the previous levels of demand irrespectively of the cost of health services. Appendix 1 Table 1 - Labour demand function (Lι) COUN. c Τ WRt WRt-1 Nt Nt-1 Lt-1 108 BEL. -39,0123 0,0253-0,5236 2,7613 0,8954 (-2,6834) (2,2786) (-3,6733) (1,9134) (3,1256) D.M. -26,1276-0,3176 4,3438 0,4567 (-2,0367) (-3,5612) (3,6623) (1,4786) F.. -17,1765-0,3467 2,9765 0,8675 (-4,3987) (-5,1276) (3,5091) (2,3411) D. -44,1897 0,0306-0,3014 2,4532 0,4635 (-1,2211) (2,7854) (-2,9813) (2,6745) (2,1123) GR. -10,1786-0,2276 2,0776 0,9734 (-1,9013) (-2,0141) (2,6734) (3,4511) IRL. -7,1289 0,0306-0,1934 1,7123 0,4213 (-1,5189) (1,1034) (-1,3476) (1,9076) (1,8976) 1. -76,1278-0,5522 0,1811 3,1867 (-2,5674) (-2,1314) (2,7843) (11,098)

NIKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES- Ν ο 2 (2002), 97-126 L. -3,4166 0,0046-0,0442 0,1998 0,6423 (-1,0347) (2,8725) (-3,3612) (1,8754) (2,1934) NL. -10,2376-0,2711 0,9867 0,3578 (-2,1378) (-1,9831) (1,9970) (2,7865) Ρ. -11,895-0,2715 0,1008 2,5643-2,0124 1,0234 (-2,4312) (-3,1415) (2,7723) (2,2278) (-2,8976) ( 4,5674) s. -17,4326-0,1711 1,9677 (-2,8954) (-3,1415) (3,4456) G.B. -18,9023-0,6317 1,9453 0,5634 (-4,7833) (-3,1786) (2,3627) (7,4513) Α. -3,9854-0,9015 1,0987 0,1178 (-3,0346) (-2,1416) (2,8951) ( 4,5673) FIN. -4,56207-0,4017 1,8971 0.2754 (-1,9564) (-2,7712) (2,3372) (3,9822) sw. -6,9713-0,2014 2,8976 0,1176 (-3,1720) (-2,2415) (3,9843) (5,7843) Table 2 - Labour demand function (Diagnostic Tests) COUN. Α Β c D F R2 BEL. 0,0342 0,1874 2,2267 1,6523 F( 4,35) = 395,12 0.9745 [0,7634] [0,6545] [0,2215] [0,1412] D.M. 0,0176 0,1912 0,3217 0,9844 F(3,36) = 675,34 0.9611 [0,8211 ] [0,6723] [0,4219] [0,4411 ] F. 3,3675 5,9834 1,341 6 0,1052 F(3,36) = 129,56 0.9899 [0,0623] [0,0098] [0,7615] [0,2786] D. 0,0542 0,7785 2,0197 0,1823 F(4,35) =205,67 0.9218 [0,6 109] [0,3417] [0,6318] (0,6111] GR. 2,1167 1,9831 1,0573 0,1056 F(3,36) =325,87 0.9534 [0,1453] [Ο, 1813 ] [0,2976] [0,2765] IRL. 0,3522 0,1934 3,4528 0,4428 F( 4,35) = 98,675 0.9684 [0,3476] [0,4435] [0,0198] [Ο,2911 ] 1. 0,6033 4,1311 0,4438 0,4498 F(3,36) =543,ll 0.9899 [0,2912] [0,2317] [0,2010] [0,3318] L. 1,5521 1,9871 1,6745 1,9843 F( 4,35) =786,10 0.9712 [0,2017] [Ο, 2786 ] [0,3476] [0,1927] 109

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙΘΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τ εύχος 2.(2002), 97-126 NL. 5,1278 1,8563 0,7643 3,8767 F(3,36) = 1012,9 0.9645 (0,0056] [0,3564] [0,3675 ] (0,0298] Ρ. 3,1065 0,1034 0,1065 0,3421 F(5,34)=765,44 0.9942 [0,0564] (0,4531] [0,6015] (0,3276] s. 2,3411 0,8711 0,7754 0,0125 F(2,37)=395,12 0.9317 [0,0299] [0,6113) (0,4423] (0,7653] G.B. 2,2216 4,1189 1,9851 0,2987 F(3,36)= 127,98 0.9744 (0,1098] (0,0065] (0,3211] (0,5567] Α. 1,4311 0,1715 2,1345 0,1056 F(3,36) = 650,11 0.9833 (0,1076] (0,3412] (0,3018] (0,6711] FIN. 3,8811 6,1713 1,2987 0,2017 F(3,36)= 1001,9 0.9677 [Ο, 0987] (0,0501] [0,3543] (0,4533] sw. 0,23 16 2, 7861 0,4967 0,5534 F(3,36) = 804,94 0.9623 (0,5528] (0,1145] [0,4217] [0,2634] Table 3 - Hospital beds demand function (Kt) COUN. c t ΒRι BRt-1 Νι Νι-1 Κι-1 110 BEL. -10,4532-0,1134 1,5934 0,8954 (-1,9865) (-2,8876) (2,0563) (3,1433) D.M. -20,9865-0,1987-0,1176 4,1427 0,1786 (-3,1977) (-2,0178) (-2,3356) (2,6754) (2,3912) F. -11,9965-0,1443 1,8945 (-1,5765) (-0,9871) (0,3326) D. -3,4017-0,1897 0,3076 0,1738 (-1,9811) (-2,6542) (1,9867) (1,9987) GR. -2,9976-0,1786 0,6711 0,1548 (-2,0233) (-2,0551) (2, 7753) (2,0987) IRL. 2,0564-0,4765 0,3012 0,3987 (1,1776) (-8,6751) (1,1765) ( 4,5528) ι. -20,345-0,5634 6,7754-11,786 (-2,6631) (-2,0654) (4,8976) (-2,5647) ι. 2,7771 0,0101-0,1087 1,2333 (1,7651) (2,2145) (-2,8751) (1,9564) NL. -4,9816-0,0613 0,1987 (-1,1198) (-2,9876) (1,2355)

NIKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 Ρ. -1,1271-0,00109-0,0307 0,2217 1,008 (-0,7654) (-2,2214) (-2,4536) (1,5523) (11,875) s. -10,675-0,0534-0,2231 3,8725 0,3312 (-2,0897) (-2,9655) (-1,9861) (1,9878) (1,9879) G.B. -4,1677-0,4456 0,9987 0,5548 (-2,9811) (-1,8972) (2,0455) (2,9845) Α. -4,9819-0,1945 0,3311 0,4428 (-1,7871) (-2,765) (1,7453) (3,8965) FIN. -3,9856-0,2345 1,3425 (-2,0187) (3,7861) (10,675) sw. -6,1971-0,0211-0,0734 2,8543 (-1,1018) (-2,0981) (-1,9876) (1,9867) Table 4 - Hospital beds demand function (Diagnostic Tests) COUN. Α Β c D F R2 BEL. 3,9078 1,9875 1,1178 0,1266 F(3,36)= 1123,9 0.9544 [0,0289] [0,3427] [0,5421 ] [0,4318] D.M. 0,0824 0,1986 0,4352 2,8871 F( 4,35) = 128,88 0.9321 [0,6612] [0,3865] [0,2895 ] [0,2054] F. 5,9876 2,3467 2,0961 0,1876 F(2,37) = 98, 786 0.8988 [0,0176] (0,0287] (0,4416] (0,6218] D. 1,7865 0,2987 0,1675 0,7654 F(3,36) = 327, 10 0.9911 (0,2267] (0,5532) (0,7418) (0,4498) GR. 0,4567 2,8711 1,9871 0,2985 F(3,36) = 77,342 0.8799 [0,4128) (0,0755) (2,896) (0,3298] IRL. 0,5923 0,2927 0,1278 1,0961 F(3,36) = 128,98 0.9432 [0,2978] [0,4327] [0,4428) (0,2089] 1. 4,8865 2,1875 1,8743 0,7745 F(3,36) = 65,667 0.8218 (0,0209] (0,3265) (0,2378] (0,2733] ι. 0,4655 2,7863 5,9855 0,5544 F(3,36)=29,897 0.8438 (0,4013) (0,2765) (0,0984) (0,3712) NL. 2,6754 1,8765 3,1313 1,0564 F(2,37)= 1187,8 0.9019 (0,0564] (0,2317) (0,1655] (0,1987] Ρ. 0,5013 0,4432 2,9845 2,7865 F( 4,35) =95,787 0.9667 [0,3522) (0,5673) (0,1098] [0,0061] 111

Ι ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τ εύχος 2 (2002), 97-126 s. 0,0876 1,8975 1,7745 0,1235 F( 4,35) =40,444 0.8667 [0,5698] [0,2984] [0,2985] [0,6541] G.B. 3,2987 6,0397 3,0155 5,9943 F(3,36) = 1278,9 0.9211 [0,0543] [0,0321] [0,1786] [Ο,0167] Α. 1,2876 1, 7639 0,1236 0,1987 F(3,36) =278,99 0.9019 [0,3013] [0,1894] [0,4318] [0,4413] FIN. 0,4745 3,6722 3,8564 0,6054 F(2,37)=1001,9 0.9776 [0,3056] [0,2978] [0,1087] (0,3331] sw. 2,9876 2,7865 1,7854 0,0876 F(3,36) = 77,985 0.9222 (0,3897] (0,1675] (0,1412] (0,6765] Table 5 - Investment function (It) 1-: ϊλ COUN. ;;;c t Kt Kt-1 GDPt GDPt-1 It-1 112 BEL. -4,7833-0,5218 0,2012 0,4218 0,4344 (-2,9867) (-2,3457) (1,7933) (2,2511) (3,0417) D ~M. -4,6733-0,0292-0,2895 1,15515 0,2612 (-1,8762) (-2,1713) (-3,2176) (2,1566) (1,3326) F. 13,8923-1,1188 0,3218 0,6034 (2,3416) (-1,7317) (-1,9427) (3,7845) D. -1,7611-0,7711 0,4013 0,6012 (-2,1128) (-2,1675) (2,8823) (2,9966) GR. -1,3782-0,0299-0,7711 0,5011 0,7317 (-0,7719) (-1,4428) (-2,1620) (1,3735) (2,0192) IRL. -4,0564-0,0442 1,1635 0,0811 (-4,2199) (-2,1998) (10,553) (1,7832) 1. -3,1884-0,0384-3,9117 11,4328 2,0941 0,7825 (-1,0228) (-1,9023) (-2,9331) (3,1317) (2,6417) (4,1765) ι. 3,1288-1,4419 0,1755 0,7515 (3,4544) (-1,8829) (1,9421) (3,4427) NL. 20,7811-1,5311 0,3218 0,7623 (2,1318) (-4,4319) (1,6739) ( 4,1178) Ρ. 2,01187-0,7734 1,1763 0,8713 0,8834 (1,5528) (-2,7318) (13,186) (-2,2417) (2,9934) s. 2,9917-0,0833-1,1178 1,4287 0,2034 (2,8442) (-3,4418) (-2,8523) (2,5728) (1,6533)

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 G.B. 18,9422-0,0599-0,1945 1,2122 0,4537 (2,8842) (-2,9811) (-2,1311) (2,9624) (3,3556) Α. -4,9167. -0,4418 1,5324 0,1623 (-3,6618) (-2,9416) (2,7633) (2,4438) FIN. 5,9217-1,5113 0,4934 0,4725 (2,9112) (-2,0227) (2,6129) (10,354) sw. -1,8826-0,5529 0,85013 0,5912 (-1,5528) (-2,5428) (3,1017) (2, 7833) Table 6 - Investment function (Diagnostic Tests) COUN. Α Β c... D F.. R2 BEL. 0,3028 4,1167 0,5518 0,1443 F(4,35)=1044,1 0.9311 (0,6634] (0,0492] (0,4217] (0,5912] D.M. 0,0466 1,6728 2,5527 2,7376 F(4,35) = 120,34 0.8015 (0,7134] [0,2015] (0,1444] [0,1035] F. 5,2317 2,2734 0,3810 3,1145 F(3,36)=87,884 0.9117 (0,0210] (0,1615] (0,7523] [0,0813] D. 0,5634 4,5217 2,7865 0,2225 F(3,36) = 1299,1 0.9876 (0,3875] (0,1215] (0,0913] (0,3912] GR. 1,3728 0,1013 2,9833 4,9317 F(4,35)=345,13 0.9645 [0,3017] (0,5734] [0,1015] [0,1011] IRL. 0,8034 1,1511 0,1733 2,9999 F(3,35) = 207,40 0.9554 (0,3611] (0,2518] [0,2217] [0,0714] 1. 1,0342 0,9013 6,7723 0,0104 F(5,34) =58,119 0.8911 [0,2955] [0,3724] [0,0208] [0,9015] ι. 2,9833 2,9674 0,2511 0,5235 F(3,34) =87,451 0.9118 (0,1235] (0,0845] (0,7798] (0,4217] NL. 0,6534 0,2552 0,6723 6,2877 F(3,34)=321,19 0.9567 (0,4011] (0,5511] (0,5812] [0,0128] Ρ. 0,2342 6,0231 4,2675 1,8004. F( 4,35) = 1007,9 0.9894 [0,7123] [0,0207] (0,1127] (0,1722] s. 2,1134 0,0110 2,2455 6,9017 F( 4,35)=313,43 0.9673 [0,3015] [0,8915] [0,1620] [0,0399] G.B. 1,7755 0,2417 4,1318 0,4566 F( 4,35) = 89,975 0.9445 (0,3019] (0,4317] (0,0519] (0,4012] 113

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τ εύχος 2 (2002), 97-126 Α. 0,4011 3,8966 3,3045 0,2035 F(3,35) =99,564 0.9017 (0,3356] (0,1894] (0,0611] (0,4110] FIN. 1,3827 0,4428 0,7312 1,5823 F(3,35) =87, 131 0.9527 (0,2615] (0,4025] (0,5015] (0,2114] sw. 3,3816 5,0198 7,1123 0,3015 F(3,35) =367,90 0.9443 (0,0710] (0,0317] [0,0167] (0,4112] Table 7 - Health services demand function (Nt) COUN. c t GDPt GDPt.J PRt PRt-1 Nt-1 114 BEL. 4,4912-0,4122-0,2044 (5,1377) (3,8777) (-2,9854) D.M. 0,4812-0,0019 0,0138-0,0066 0,9813 (1,1455) (-1,8029) (2,6777) (-1,9343) ( 4,2334) F. 2,9714 0,0017 0,0388-0,0348 0,5733 (2,1943) (2,1025) (1,2612 ) (-1,1314) (5,7738) D. -1,2755 0,0045 0,1014-0,0711 0,8010 (-2,1754) (1,1771) (2,3334) (-3,9976) (6,4311) GR. 1,7721-0,0092 0,5991-0,2811 (1,0971) (-3,1660) (2,9815) (-3,1174) IRL. 1,4427-0,0077 0,1266-0,0176 0,5232 (1,7322) (-2,5026) (2,1555) (-1,6342) (3,4877) 1. 5,5672 0,0055 0,1012-0,0882 (12,753) (18,753) (3,3375) (-6,1318) ι. 0,8077 0,0465-0,0112 0,4310 (2,1784) (3,1866) (-2,5434) (6,1176) NL. -0,5018-0,0061 0,0211-0,0211 0,5125 (-1,9733) (-2,4452) (2,1786) (-2,4343) (4,5519) Ρ. 3,6327 0,0866-0,6034 0,3876 (9,4279) (2,9322) (-4,7761) (2,9558) s. -1,14295-0,0014 0,0199-0,0112 0,7009 (-1,5082) (-1,4218) (2,6645) (-1,6777) (3,4015) G.B. 1,3418 0,0013 0,0332-0,0238 0,4443 (5,4544) (3,7745) (4,4114) (-2,3218) (2,9987) Α. -1,2017-0,0553-0,1443 0,6013 (-2,4218) (2,6544) (-1,9986) ( 4,4427)

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 FIN. 3,7554 0,0020 0,1044-0,103 0,2211 (3,1044) (2,4317) (2,1655) (-1,232) (3,0154) sw. -1,1233-0,0018 0,0872-0,0613 0,4884 (-2,8854) (1,1321) (3,0443) (-4,2322) (2,2238) Table 8 - Health services demand function (Diagnostic Tests) COUN. Α Β c D F R2 BEL. 4,8765 5,6519 0,5511 5,9987 F(2,37) = 105,22 0.8711 [0,025 41 [0,0139) [0,6774) [0,0144) D.M. 4,1044 4,1654 1,9612 0,5772 F( 4,35) = 1123,2 0.9813 [0,0435) [0,0403) [0,3327) [0,4007] F. 4,2322 0,3566 1,9898 5,875 F( 4,35) = 1235,5 0.7988 [0,0401] [0,4855) [0,2783) (0,0196) D. 0,4888 0,0127 0,5565 0,0124 F( 4,35) = 998,87 0.9013 [0,3140] [0,7681] [0,5347) [0,7895] GR. 2,9234 0,5518 0,711 7 1,2332 F(3,37) =45,567 0.8988 [0,1160] [0,2873] [0,6013) [0,4033] IRL. 0,0447 1,8717 0,4343 0,1009 F( 4,35) = 1008,9 0.9654 [0,7844] [0,3317] [0,4998) [0,3776) 1. 2,3311 5,1998 1,9998 0,5568 F(3,37) = 1123,4 0.9321 [0,1235] [0,0567) [0,4001) (0,4090) ι. 2,7656 0,4917 2,1327 0,1876 F(3,36) = 1985,5 0.9878 [0,1549) [0,3214) [0,2015) [0,5511) NL. 0,0789 4,6514 3,1331 3,7772 F(4,35) =1677,7 0.99 11 [Ο, 7013) [0,0401) [0,1005) [0,0597) Ρ. 1, 7995 1, 7818 0,3445 6,9881 F(3,35) =92,090 0.8676 [0,2345] [0,2017) [0,6672) [0,0123] s. 0,1988 0,3018 2,2278 0,1923 F(4,35)=2011,7 0.9878 [0,33111 [0,5097) [0,1776) [0,4211) G.B. 0,3844 0,0103 1,8897 0,1998 F( 4,35) = 1236,7 0.9870 [0,3771) [0,7998) [0,3004) [0,5811) Α. 0,2088 0,0231 1,1123 0,0199 F(3,35) = 1004,5 0.9543 [0,4817] [0,7765) [0,6009) [0,4323) FIN. 0,1238 3,4213 5,1445 0,5017 F( 4,35)=778,98 0.9675 [0,4328) [0,0776) [0,1167) [0,4002) 115

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ -Τεύχος 2 (2002), 97-126 116 sw. 2,1178 3,1676 2,8877 0,4013 F( 4,35) = 123,45 0.9688 [0,1238] [0,1443] [0,2332] (0,2811] Appendix 2 Table 11 - Labour dynamic multipliers for 5% increase ίη salaries YEARS 1 2 3 4 5 TOTAL Β. -2,3654-1,5533-0,9845-0,6522-0,3552-5,9106 D.M. -2,1027-1_,2034 0,4447 0,9222 0,2397-1,6995 F. -3,4311-1,6776-0,9187-0,6677-0,0917-6,7868 D. -1,2913-0,6987-0,4865-0,3660-0,0219-2,8644 GR. -1,4568-1,1432-0,9076-0,7449-0,6134-4,8659 IRL. -1,2714-0,4954-0,1905-0,0754-0,0458-2,0785 1. -1,8677-1,8990-0,0776-0,0555-0,0415-3,9413 ι. -0,0401-0,0345-0,0277-0,0152-0,0079-0,1254 NL. -3,9015-0,7187-0,5403-0,4232-0,3132-5,8969 Ρ. -1,5522-0,7211-0,3482-0,1965-0,0888-2,9068 s. -1,9055-1,1166-0,7422-0,4226-0,0890-4,2759 G.B. -0,8423-0,3492-0,3114-0,2123-0,1542-1,8694 Α. -1,4187-0,9065-0,7327-0,4230-0,1509-3,63 18 FIN. -2,2033-1,0188-0,6271-0,3899-0,1122-4,3513 sw. -2,8551-1,1997-0,0449 0,4254 0,7344-5,2595 Table 12 - Hospital beds dynamic multipliers for 5% increase ίη salaries YEARS 1 2 3 4 5 TOTAL Β. ο -0,0196-0,0349-0,0370-0,0245-0,1160 D.M. -0,1098-0,0924-0,0710-0,0632-0,0372-0,3727 F. -0,0722-0,0480-0,0171-0,0017 0,0211-0,1601 D. -0,0860-0,0752-0,0567-0,0389-0,0342-0,2910 GR. -0,2220-0,0313 0,0467 0,0722 0,0755-0,0589 IRL. -0,0059-0,0030-0,0029-0,0019-0,0023-0,0160 1. -0,0644-0,0462-0,0313-0,0120-0,0041-0,1580 ι. -0,0079-0,0060-0,0040-0,0033-0,0009-0,0221 NL. -0,0010-0,0008-0,0007-0,0002 0,0010-0,0017

NIKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 Ρ. -0,5510-0,4759-0,4472-0,3945-0,3847-2,2533 s. -0,0617-0,0613-0,0475-0,0218 0,0138-0,1785 G.B. -0,0180-0,0170-0,0152-0,0117-0,0061-0,0680 Α. -0,1944-0,1429-0,1139-0,1011-0,0866-0,6389 FIN. -0,0571-0,0488-0,0390-0,0310-0,0219-0,1978 sw. -0,1439-0,1249-0,1112-0,1040-0,0942-0,5782 Table 13 - Investment dynamic multipliers for 5% increase ίη salaries YEARS i< ' 1 2 3 4 5 Η TOTAL Β. 0,0031 0,0074 0,0152 0,0231 0,0283 0,0771 D.M. 0,0132 0,0191 0,0231 0,0355 0,0444 0,1353 F. 0,0053 0,0084 0,0156 0,0190 0,0257 0,0740 D. 0,1305 0,1397 0,1538 0,1672 0,1866 0,7778 GR. ο 0,1165 0,1892 0,1898 0,1290 0,6245 IRL. ο 0,0002 0,0023 0,0031 0,0043 0,0090 1. ο 0,0344 0,0599 0,0974 0,2494 0,4411 ι. 0,0019 0,0050 0,0081 0,0107 0,0152 0,0409 NL. 0,0116 0,0299 0,0432 0,0599 0,0771 0,2217 Ρ. ο 0,0012 0,0067 0,0107 0,0143 0,0329 s. 0,0010 0,0055 0,0955 0,1184 0,1929 0,4133 G.B. 0,0142 0,0298 0,0376 0,0466 0,0562 0,1844 Α. 0,0967 0,1211 0,1394 0,1542 0,1688 0,6802 FIN. 0,0272 0,0543 0,0888 0,1082 0,1163 0,3948 sw. 0,0268 0,0348 0,0491 0,0612 0,0767 0,2486 Table 14 - Health services dynamic multipliers for 5% increase ίη salaries YEARS 1 2 3 4 5 TOTAL Β. -0,0112-0,0117-0,0054 0,0024 0,0083 0,0024 D.M. -0,0215-0,0187-0,0167-0,0100 0,0025-0,0644 F. -0,0099 0,0010 0,0012 0,1212 0,1498 0,2633 D. -0,0847-0,0777-0,0694-0,0634 0,2767-0,01 85 GR. -0,3099 0,1327 0,0892 0,0689 0,05 12 0,0321 IRL. -0,0276-0,0193-0,0088-0,0093-0,0040-0,0690 117

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύ χος 2 (2002), 97-126 118 ι. -0,0231-0,0227-0,0183-0,0167-0,0155-0,0963 ι. -0,0186-0,0108-0,0090-0,0105-0,0067-0,0556 NL. -0,0167-0,0165-0,0022 0,0203 0,0480 0,0329 Ρ. -0,4480-0,4442-0,3865-0,3633-0,2123-1,8543 s. -0,0299-0,0298-0,0272 0,0112 0,0790 0,0033 G.B. -0,0559-0,0487-0,0343-0,0297-0,0187-0,1873 Α. -0,1283-0,1112-0,0672-0,0377 0,0034-0,3410 FIN. -0,0154-0,0045 0,0394 0,0591 0,0746 0,1532 sw. -0,0287-0,0192-0,0155-0, 0 ~ 12 0,0072-0,0674 Table 15 - Total cost dynamic multipliers for 5% increase in salaries YEARS 1 2 3 4 5 TOTAL Β. 1,1765-0,6776-0,4642-0,3127-0,1834-0,4614 D.M. 1,1512-0,4954-0,3711-0,1985-0,0977-0,0115 F. 0,4326-0,5237-0,0407-0,0231-0,0183-0,1732 D. 1,2177-0,2820-0,2235-0,1985-0,0744 0,4393 GR. 0,9265-0,3987-0,2764-0,1900-0,1499-0,0885 IRL. 2,4346-0,6844-0,2923-0,1145-0,0417 1,3017 ι. 3,0321-0,1910-0,1364-0,0533-0,0199 2,6315 ι. 1,1326-0,0671-0,0666-0,0408-0,0254 0,9327 NL. 0,3985-0,3134-0,2399-0,1790-0,1263-0,4601 Ρ. 0,3607-0,1022-0,0870-0,0578-0,0452 0,0685 s. 2,7312-0,1833-0,0965-0,0777-0,0244 2,3493 G.B. 2,6615-0,1999-0,1873-0,1321-0,0908 2,0514 Α. 1,1237-0,2520-0,2124-0,1923-0,1167 0,3503 FIN. 0,9335-0,4713-0,4231-0,3129-0,2229-0,4967 sw. 1,2447-0,5511-0,4559-0,3330-0,1885-0,2838 Table 16 - Cost of bed occupancy dynamic multipliers for 5% increase in salaries YEARS 1 2 3 Η' 4 5 TOTAL Β. 0,9933-0,6723-0,4452-0,2973-0,1869-0,6084 D.M. 1,1231-0,4788-0,3658-0,1694-0,0948 0,0143 F. 0,4287-0,4915-0,0233-0,0174-0,0072-0,1107

NIKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-126 D. GR. IRL. 1. ι. NL. Ρ. s. G.B. Α. FIN. sw. 1,1995-0,1991-0,1525-0,1263-0,0967 0,6249 1,2387-0,5166-0,3493-0,2532-0,1983-0,0787 2,2505-0,6632-0,2723-0,1128-0,0396 1,1626 1,1990-0,7298-0,5774-0,3999-0,1944-0,7025 1,1237-0,0477-0,0366-0,03 35-0,0273 0,9786 0,3888-0,2956-0,2255-0,1682-0,0983-0,3988 0,3515-0,0723-0,0372-0,0177-0,0100 0,2143 2,7490-0,9292-0,8785-0,6255-0,5183-0,2025 2,7152-0,4277-0,1690-0,1562-0,1073 1,8550 1,6317-0,3483-0,2844-0,2057-0,1694 0,6239 1,1972-0,2972-0,2172-0,1731-0,1284 0,3813 1,9383-0,4765-0,3561-0,2180-0,1066 0,7811 Table 17 - Labou dynamic multipliers for 5% increase ίη the cost of hospital bed YEARS 1 2 3 4 5 TOTAL Β. -0,3887-0,3552-0,2572-0,1243-0,0900-1,2154 D.M. -0,1232-0,1081-0,0932-0,0874-0,0682-0,4801 F. -1,3178-0,8974-0,7480-0,6972-0,4276-4,0880 D. -1,3234-0,6894-0,2773-0,0275 ο -2,3176 GR. -1,2603-0,8943-0,6684-0,5195-0,4130-3,7555 IRL. -0,0338-0,0291-0,0256-0,0192-0,0188-0,1265 1. -0,1452-0,1437-0,1200-0,1057 ο -0,5146 ι. -0,0398-0,0396-0,0345-0,0192 ο -0,1331 NL. -0,2476-0,2383-0,2120-0,1631-0,0977-0,9587 Ρ. -1,4123-1,2211-1,1562-0,7844-0,2363-4,8103 s. -0,5887-0,1490-0,1390-0,1406-0,1055-1,1228 G.B. -0,3194-0,2756-0,2383-0,1582-0,0972-1,0887 Α. -1,4575-0,8473-0,5976-0,3290-0,1180-3,3494 FIN. -0,8584-0,6869-0,5182-0,3976-0,3065-2,7676 sw. -0,2772-0,2295-0,2054-0,1163-0,0995-0,9279 119

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τ ε ύ χος 2 (2002), 97-126 Table 18 - Hospital beds dynamic multipliers of the 5% increase ίη the cost of hospital bed YEARS 1 2 " $ 4 5 TOTAL Β. -0,6533-0,2612-0,2044-0,1342-0,0598-1,3129 D.M. -0,5100-0,3284-0,2154-0,1390-0,0894-1,2822 F. -0,3732-0,2697-0,2342-0,1732-0,1088-1,1591 D. -0,3485-0,3231-0,2986-0,2396-0,1733-1,3831 GR. -0,8444-0,3463-0,1200-0,0266 0,0238-1,3135 IRL. -2,1285-0,6452-0,1966-0,0354-0,0176-3,0233 1. -0,2185-0,1834-0,0799-0,0348 ο -0,5166 L. -1,9583-1,4994-0,8753-0,6186-0,1237-5,0753 NL. -0,5574-0,4897-0,4294-0,3865-0,3411-2,2041 Ρ. -0,5632-0,4788-0,4526-0,3980-0,3896-2,2822 s. -0,5890-0,1474-0,1376-0,1342-0,0683-1,0765 G.B. -0,3948-0,3842-0,3764-0,3685-0,3555-1,8794 Α. -0,5472-0,4912-0,4152-0,3483-0,2799-2,0818 FIN. -0,6996-0,6085-0,5374-0,4786-0,4065-2,7306 sw. -0, 7163-0,6490-0,5962-0,5192-0,4549-2,9356 120 Table 19 - Investment dynamic multipliers of the 5% increase ίη the cost of hospital bed YEARS 1 2 3 4 5 TOTAL Β. 0,2233 0,1967 0,1557 0,1228 0,0755 0,7740 D.M. 0,2098 0,1913 0,1394 0,0945 0,0628 0,6978 F. 0,8667 0,8077 0,6962 0,5362 0,4595 3,3663 D. 0,6824 0,6160 0,595 1 0,5867 0,5796 3,0598 GR. 0,6498 0,6594 0,6628 0,6016 0,5980 3,1716 IRL. 0,0977 0,0932 0,0894 0,0270 0,0044 0,3117 1. 0,0994 0,0870 0,0760 0,0562 0,0478 0,3664 ι. 0,2774 0,2565 0,2296 0,2022 0,1791 1,1448 NL. 0,1983 0,1797 0,1588 0,1338 0,1007 0,7713 Ρ. 0,1192 0,1180 0,1263 0,1265 0,1143 0,6043 s. 0,1955 0,2492 0,2970 0,2344 0, 1676 1,1437 G.B. 0,8267 0,9254 1,0252 1,2351 1,6968 5,7092 Α. 0,7259 0,6896 0,6243 0,5473. 0,4845 3,0716

NΙKOLAOS ORITSAKIS - REVIEW OF ECONOMIC SCIENCES - Νο 2 (2002), 97-1 26 FIN. 0,4379 0,4006 0,3367 0,2972 0,2493 1,7217 SW. 0,3044 0,2261 0,1673 0, 1159 0,0857 0,8994 Table 20 - Health services dynamic multipliers of the 5% increase ίπ the cost of hospital bed YEARS 1 ++ 2 3 4 5 TOTAL Β. -0,0416-0,0381-0,0355-0,0255 ο -0,1407 D.M -0,0152-0,0115-0,0106-0,0093-0,0093-0,0559 F. -0,0794-0,0527-0,0333-0,0188-0,0122-0,1964 D. -0,2277-0,2248-0,2259-0,2133-0,1134-1,0051 GR. -0,8087 0,1739 0,0982 0,0600 0,0418-0,4348 IRL. -0,0159-0,0136-0,0064-0,0049-0,0039-0,0447 1. -0,0180-0,0172-0,01 59-0,0152-0,0128-0,0791 L. -0,0293-0,0260-0,0220-0,0196-0,0158-0,1127 NL. -0,0234-0,0229-0,0211-0,0198-0,0180-0,1052 Ρ. -0,4453-0,4398-0,3590-0,2083 ο -1,4524 s. -0,028 1-0,0256-0,0255-0, 01 88-0,0100-0,1080 G.B. -0,0494-0,0413-0,0362-0,0240-0,0148-0,1657 Α. -0,1366-0,1266-0,1157-0,1052-0,0962-0,5803 FIN. -0,0772-0,0629-0,0533-0,0464-0,0329-0,2727 sw. -0,0350-0,0262-0,0196-0,01 29-0,0118-0,1055 Table 21 - Total cost dynamic multipliers of the 5% increase in the cost of hospital bed YEARS 1 2 3 4 5 TOTAL Β. 2,5843-0,3170-0,2685-0,1845-0,0827 1,7316 D.M. 2,6564-0,1942-0,1293-0,1076-0,0855 2,1398 F. 3,2570-0,4527-0,2469-0,1580-0,11 90 2,2804 D. 3,1809-0,5620-0,3990-0,3055-0,1596 1, 7548 GR. 2,4594-0,5158-0,2954-0,1793-0,1266 1,3423 IRL. 1,4077-0,2943-0,0963-0,0870-0,0753 0,8548 1. 3,0198-0,1700-0,1227-0,0484-0,0190 2,6597 L. 1,2532-0,0293-0,0280-0,0238-0,0195 1,1526 NL. 2,8966-0,3733-0,2963-0,2590-0,2278 1,7402 Ρ. 3,9511-0,5387-0,5096-0,4684-0,4312 2,0032 121

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύ χος 2 (2002), 97-126 s. 2,7163-0,1794-0,1234-0,0944-0,0877 2,2314 G.B. 2,3500-0,3475-0,3289-0,2970-0,2536 1,1230 Α. 2,7193-0,6628-0,5150-0,4365-0,3380 0,7670 FIN. 1,4212-0,4439-0,3137-0,1870-0,1076 0,3690 sw. 2,1563-0,5190-0,3432-0,2294-0,1428 0,9219 Table 22 - Cost of bed occupancy dynamic multipliers of the 5% increase in the cost of hospital bed YEARS 1 2 3 4 5 TOTAL Β. 2,5877-0,5836-0,2270-0,1458-0,0599 1,5714 D.M. 2,6565-0,1948-0,1284-0,0828-0,0728 2,1777 F. 3,2587-0,4227-0,1967-0,1654-0,1487 2,3252 D. 3,4213-0,4474-0,1773-0,0793-0,0683 2,6490 GR. 3,2964. -0,6880-0,3412-0,2387-0,1643 1,8642 IRL. 1,4228-0,2871-0,0989-0,0729-0,0066 0,9573 1. 3,0198-0,1590-0,0965-0,0135-0,0106 2,7402 L. 1,1544-0,0083-0,0039-0,0044-0,0027 1,1351 NL. 2,8974-0,2730-0,2372-0,2058-0,1988 1,9826 Ρ. 3,9528-0,2648-0,1584-0,1128-0,0696 3,3472 s. 2,7418-0,1992-0,1596-0,1033-0,0899 2,1898 G.B. 2,3999-0,3266-0,3055-0,2967-0,2528 1,2183 Α. 2,1437-0,5184-0,4028-0,2943-0,1774 0,7508 FIN. 2,4556-0,3038-0,2245-0,1365-0,0827 1,7081 sw. 2,7327-0,6292-0,5572-0,3934-0,2644 0,8885 Appendix 2 Diagram 1 - Labour dynamic multipliers for 5% increase ίη salaries 122 1 1 1962 1963 Years 1964 / Β DM F,- D, GR 1Rt. - 1 ι NL / Ρ. $ Οθ 1~5 / ~ $Ν

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES- Νο 2 (2002), 97-126 Diagram 2 - Hospital beds dynamic multipliers for 5% increase ίη salaries 1962 1963 Years 1964 1~5 /.. DM F / ο / GR Rl 1. ι,... / Ρ. $ "" Α / ΡΗ sw Diagram 3 - Investment dynamic multipliers for 5% increase ίη salaries ο 1962 1963 Years / Β ΟΜ F / u / Gt< IRI., ' ι / Νι / Ρ. & GB 1964 1~,. :.... sw Diagram 4 - Health services dynamic multipliers for 5% increase ίη salaries Ο..ο. -0. -0.,,.,-'/' / - --------- ~ ~......;..._~-'~,_~--~r;;τ~~;;;:ο:~;~~~~~~;_:;.;~~..ο. --- - --- - - --- ----- ------ -0 s.ι.:.-=~~~~-+-~~~~--t~~~~~-t-~~~~-:-:1: 1961 1962 1963 1964 1~5 Years Diagram 5 - Total cost dynamic multipliers for 5% increase ίη salaries / Β DM F, ο / GR IRL 1 ι Nl Ρ s Gθ Α /,... sw 1 '""" <.. ο ~;-::~;,_~~~~~~.:~~~-=-- - -.1.1.-~~~~-t-~~~~-t-~~~~-:t--:--~~~:-::ι. _, Β ΟΜ F [J / Gt< IR! 1 ι Νι / Ρ 1961 1962 1963 1964 19{δ)65 / ΡΗ "" Years " s 08 Α 123

ΝΙΚΟΛΑΟΣ ΔΡΙΤΣΑΚΗΣ - ΕΠΙθΕΩΡΗΣΗ ΟΙΚΟΝΟΜΙΚΩΝ ΕΠΙΣΤΗΜΩΝ - Τεύ χος 2 (2002), 97-126 Diagram 6 - Cost of bed occupancy dynamic multipliers for 5% increase ίη salaries 3. 2. 2. 1 1. ~- - -::ο _-:-~~~-~~c:~;:::_:_:~~~s::~~t~;?;~;~--c~ t ~ -- -----. ---.--- 1961 1962 1963 1964 1~ Υcc:ιι;:; Diagram 7 - Labour dynamic multipliers of the 5% increase ίη the cost of hospital bed / ~ " F / u / GR IRl 1.. ι / ρ 8,, "" "" / F" -0. -1. 1962 1963 Years / ~ ΟΜ F ' D GH RJ.,' ' ι, NL / ρ,' s 08 1964 19Ε:Sβ5 / :... "" Diagram 8 - Hospital beds dynamic multipliers of the 5% increase ίη the cost of hospital bed Ο. 1962 1963 Years 1964 / θ ΟΜ F / D GR IRL. ' ι NL / ρ, s Gθ Α / ΑΝ sw Diagram 9 - Investment dynamic multipliers of the 5% increase ίη the cost of hospital bed 124 2. 1. 1. / Β F "' / D GR IRl. ι L ~--- - --- ~~-""C:--c~~- cc ~.-::::cc:c,--:.o~-~--,~.-,. ~-~ -.-;_,,7;-, ;-:-:--- ~ Νι Q ------------- / Ρ _. -, --... ~, - ~ ~ - ----...._,.. -:-:-::."':'::Ξ-~.- :- ::;.~::.:. :.'7: _.:-:::.-:=- :-:-- ' S ο ο,,.,.:~-=--~~-~~,-~,-,.. ~~-~ : =...,--:-=,,.,..,... 1961 1962 1963 1964 19Ε:Sβ5, ~.. "" Years Gθ

NIKOLAOS DRITSAKIS - REVIEW OF ECONOMIC SCIENCES- Νο 2 (2002), 97-126 Diagram 10 - Health services dynamic multipliers of the 5% increase ίη the cost of hospital bed 1962 1963 Years 1964 / 8 DM F / ο / GR IRl 1 L NL / Ρ. s -G8 / " FH Diagram 11 - Total cost dynamic multipliers of the 5% increase ίη the cost of hospital bed Diagram 12 - Cost of bed occupancy dynamic multipliers of the 5% increase ίη the cost of hospital bed ~' ~- ' / θ DM F ; ~ 1 ~~>-. rι Ο ~\~~..3..:!:i--.~'i 0 :ι :, ::::::;ι--:~~.1. ; ;;;;;;- ""'""' ~-.r > t -1.L...-----+-------+-----+------1-:ι~ s, λf1ν '1961 1962 1963 1964 ::ισυιv. - Years 6. References Cooper, Μ. Η. and Α J. Culyer (1973). Health Economics. Penguin Modern Economics Reading, Middlesex. Cul\is, J. G. and Ρ. Α West (1979). The Economics of Health. Αη Introduction. Martin Robertson, Oxford. Dritsakis, Ε. Ν. and J. D. Papanastasiou (1995). Αη Econometric Analysis of the Health Sector ίη Greece. Rivista Internaziona\e di Scienze Economiche e Commerciali. Volume 42, Ν. 3, 231-240. Dritsakis, Ε. Ν. and Κ. Sarri (1998). GDP and public expenditure οη health - care: The case of Greece. Journal of Liberal Arts, Vol. 4, Νο 1, 129-137. 125

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