Time?varying income elasticities of healthcare expenditure for the OECD and Eurozone

We propose a panel data model for nonstationary variables with interactive fixed effects and coefficients that may vary over time use it to examine variation in the income elasticity of health expenditures OECD Eurozone. Our empirical analysis shows healthcare expenditure slightly increased Eurozone during 1995–2004 but remained below one. This finding suggests is not luxury good these countries.