Health Expenditure and Economic Growth in Iran: Comparing Developed, Less Developed and Undeveloped Provinces

  According to the role of appropriate health care services in the process of economic development in each country, the availability of balanced health facilities in different geographical areas of the country is very important. Hence, in this study, the relationship between health expenditure and economic growth in Iran’s provinces in the time period of 2004 - 2015 is investigated based on the panel models and using fixed and random effect estimators. The underlying provinces are divided into three groups such as developed, less developed, and undeveloped, based on the Index of Ministry of Industry, Mining, and Trade. The results indicate that health expenditure has the positive and significant effect on economic growth in all provinces, however, this effect in developed provinces are more than two other groups. Therefore, a part of the existence gap between three groups of the provinces could be explained by the gap in health expenditure.