Rural Household Characteristics and Health Expenditure in India: An Analysis

The main objective of this paper is to analyse the rural household characteristics and health expenditure in India. The study uses a nationallevel household survey and finds that health expenditure of the members of rural households in India is sensitive to changes in their income levels. The elasticity of health expenditure with respect to income is largest for high-income groups with the income elasticity of health expenditure more than 1 in absolute terms. It indicates an income elastic situation for spending on treating both short-term morbidity (STM) and longterm morbidity (LTM) by the upper income groups. It is also true in the case of drugs and medicine expenditures. The results also suggest that households incur higher total health expenditure and higher expenditure on drugs and medicines for getting treated from formal health care providers in the rural areas.