Paying for Health Care by Households in Ghana: The Effects of Poverty Status and Location

Abstract

The quest for economic growth and development can be attained based on the quality and quantity of human capital of a country and that is underpinned by the good health enjoyed by the people. This paper examines the effects of poverty status and north-south dichotomy on household’s health expenditure using data from the latest wave of GLSS-VI by estimating a Tobit model. The paper establishes considerable differences in household health expenditure with respect to two categories of poverty status (very poor and poor) and north-south dichotomy. Particularly, there was a negative significant relationship between household poverty status and demand for health. Very poor and poor households pay increasingly less on health care compared to non-poor households. Further, demand for health was significantly influenced by household characteristics such as age, household size and education in both the southern and northern part of the country. The paper recommends that policy strategies to improve income generating activities of households should be pursued as this may engender greater demand for healthcare by individuals from poorer households. Besides, policy priority should be placed on bridging health infrastructural gap between the southern and northern sectors of the country.