Last updated: February 28, 2019
Topic: BusinessMarketing
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Health and medicine is a turning precedence among 1000000s of Filipinos today. In the epoch of processed nutrient, societal frailties like imbibing and smoke, and the oncoming of legion long term, or even fatal unwellnesss, it is non surprising for people to worry about the status of their wellness and become witting of their diets and life styles. Some households try to pacify this concern by acquiring regular one-year check-ups, whilst others take preventive steps such as puting in the right vitamin addendums. In peculiar, persons who have antecedently faced wellness quandaries, or have a household history for a disease, may populate carefully and change his/her life style intentionally to advance better well-being. Conversely, other households may hold a less rigorous attack to healthcare ; for case, they may merely confer with with a physician when they sense that something is already incorrect.

A certain personal trait or physical feature may besides lend to one ‘s wellness consciousness, and therefore willingness to pass on health care. Middle-aged grownups or the aged, for case, are possibly more wellness witting than their younger opposite numbers as their bodily maps are less efficient than earlier. The frights and concerns brought approximately by the media – like pelting intelligence on AH1N1 and bird grippes, among other recent pandemics – besides necessarily affect people ‘s behavior. Greater instruction and consciousness would surely open one ‘s eyes to world, and in bend, may spur greater outgo on wellness. In any of these instances, it is apparent that the mentality of each family towards wellness reflects upon their income allotment for medical disbursals.

Furthermore, the connexion between life style and wellness is typical and unmistakable. After all, most people have good and bad wonts that would ensue to better or worse wellness. Lifestyle, defined by the Merriam-Webster lexicon as “ the typical manner of life of an single, group, or civilization, ” goes hand-in-hand with wellness, because finally it is what we typically do that will reflect upon our physical fittingness ( Merriam-Webster, 2009 ) . Lifestyle can be measured and/or estimated in a figure of ways. One is to account for outgo on frailties such as smoke and imbibing. It can besides be seen in one ‘s diet – for case, if it consists chiefly of healthy, home-cooked repasts, or processed and fast-food merchandises. High or low income may besides uncover certain things about a household ‘s willingness to pass for wellness merchandises. In kernel, lifestyle becomes a good calculator for medical outgo because it shows how good ( or how ill ) we take attention of ourselves, and accordingly, how much money we are likely to necessitate to ‘cover-up ‘ for our picks.

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By generalising and painting a portrayal of the typical Filipino family, the survey will be able to spot typical wellness patterns or beliefs of Filipino households and observe the primary determiners of medical outgo per family.


This survey aims to look into the primary subscribers to medical outgo per family. By regressing a theoretical account with the independent variables of family income, intoxicant ingestion, baccy ingestion, nutrient on a regular basis consumed outside the place, family caput age, and the family caput ‘s highest educational attainment against the dependent variable of medical outgo, the survey will be able to find which hapless wonts or societal factors have the strongest impact upon medical disbursals on a typical Filipino family.

“ Two hebdomads before the May elections, a Social Weather Station study on wellness services revealed that around eight out of 10 Filipinos of voting age believe that holding an docket for better wellness services by the authorities affairs in their pick of a new president, ” reports Celeste Llaneta from the University of the Philippines Forum for the May-June issue this twelvemonth ( Llaneta, 2010 ) .A

Furthermore, the survey is relevant to the present demands of the society as it can nail chances for relieving the hapless wellness conditions in the Philippines. For one, it can function as a stepping rock of information for the authorities, non-profit organisations, among other establishments, on which wellness plans to implement to cut down medical costs that are stultifying the budget of many households today. The bing relationship between family income and medical outgo may besides uncover which peculiar income groups need the most support, and consequently the authorities can concentrate their plans on this income group. Like in Llaneta ‘s statement above, there is a demand to develop our wellness installations and plans for the populace, and it is besides a timely aim following the May 2010 elections ( Llaneta, 2010 ) .

Furthermore, this survey can help the development of media runs suited to inform the populace on which hapless wonts ( e.g. hapless diet, smoke, and imbibing ) they should cut back on to take down family disbursals. After all, the key to existent economic development begins in the health of each family and their consciousness of the critical issues permeating the society today.


This survey on medical outgo of families is limited to the informations gathered from over 150,000 families in the Philippines in the twelvemonth 2003. The primary informations beginning is the National Statistics Office ‘s published information in the Family Income Expenditure Survey for 2003. The consequences obtained from this survey are hence merely limited within Philippine boundaries.

FIES is a countrywide study of a random sample of families from all over the Philippines, collected by professional research workers working under the National Statistics Office, guaranting the cogency of the informations.


Numerous surveies in the yesteryear have insinuated relationships between an person ‘s outgo against one ‘s ingestion wonts, physical features, and even educational attainment. Though some may state that ingestion picks all come down to personal penchant, it is inevitable for certain relationships or tendencies to be, sing the many restraints faced in our society today that force us to adhere to a certain norm. This portion of the paper will discourse the economic relationships between the dependant variable, the medical outgo ( in specific, its growing rate ) , with each independent variable, viz. : household income, intoxicant ingestion, baccy ingestion, nutrient on a regular basis consumed outside the place, family caput age, and the family caput ‘s highest educational attainment.

Specifying THE DEPENDENT VARIABLE: Medical Outgo

Medical outgo is defined in this survey as the aggregative disbursement per family on medical attention. Medical attention refers to all costs incurred by a household on medical specialties ( including vitamin addendums ) , seeing a physician, carry oning trials, inoculations, inpatient/outpatient visits, insurance, among many others. It is measured in pesos of outgo per twelvemonth.


The income informations used in this survey is limited to the wages and rewards earned, per family, from agricultural and non-agricultural activities. It excludes fringe benefits received from work, every bit good as other income generated through involvement, dividends from investings, entrepreneurial activities, gaming, among other secondary beginnings of income.

Several surveies had been made that connects high or low income with medical attention, which may cast visible radiation on its relationship with medical outgo. Harmonizing to Serdar Ozkan in his paper entitled Income Inequality and Medical Expenditures, health care determinations of each family strongly depends on whether one sees health care as a luxury good or a necessity good ( n.d. ) . Luxury goods, by economic definition, is a type of normal good wherein additions in income will take to a proportionally larger additions in demand for the luxury good, and therefore its income snap of demand is higher than 1 ( Economics Help, 2008 ) . A possible ground for this is that many people merely choose to avail of health care services when perfectly necessary, and therefore they do non see it a precedence when apportioning their income. Therefore, it could be that a family would merely prosecute in medical outgo when it has sufficient income remnant from buying necessity goods such as nutrient. That makes healthcare comparative to purchasing an expensive auto – it is non a precedence in the household budget, but it is in the dorsum of the head of the family as a good investing if they have disposable income left after purchasing basic trade goods.

In other surveies, such as Newhouse ‘s Medical-Care Outgo: A Cross-National Survey, the informations besides demonstrates and affirms a positive relationship between medical outgo and income, given that people see healthcare as a luxury good. His findings suggest that between states, the income snap of demand is greater than one, proposing that internationally, health care is regarded as a luxury merchandise ; but within states like the United States, the income snap are really little ( about negative ) suggesting that within developed states it is viewed as a necessity ( Newhouse, 1976 ) . Newhouse relates this disparity to a behavioral theory wherein physicians within a state bear down their clients likewise, whereas across states the method of rationing or administering health care to the public differs. This is possibly the cardinal ground as to why higher income can take to higher medical outgo in the Philippines – physicians tend to bear down more to wealthier consumers, whereas free or low-priced medicine is merely truly available for poorer communities. In Ozkan ‘s words, “ In order to work the demand from the top of the income distribution, wellness attention suppliers adopt more advanced engineerings and provide better quality, but more expensive goods and services leads to a rise in insurance premiumsaˆ¦ . ( and so ) families from the underside of the income distribution are driven out of the wellness insurance market ” ( Ozkan, 2010 ) . This is so a true scenario in the Philippines, and the turning spread between the rich and the hapless is merely making an even larger disparity in equality in footings of having health care.


This survey measures alcoholic ingestion in footings of the entire sum of money ( in Pesos ) spent for alcoholic drinks per family. It is assumed that higher outgo means higher intoxicant content, because in general more expensive assortments have more alcohol anyhow. Knowing the countless wellness quandaries that intoxicant can convey, it is a sensible hypothesis that higher outgo in intoxicant will take to higher medical outgo. We will discourse some of these wellness dangers below.

Alcohol, dubbed as “ the most unsafe drug on Earth ” by Dr. Sidney Cohen who specializes in drug maltreatment, has serious short-run and long-run effects that can take to an abrupt or a gradual development of unwellnesss, severally ( Alpha Nutrition, n.d. ) . In the short-run, an single pickings in inordinate sums of intoxicant may endure from:

Diuresis or H2O loss i? taking to tire and concerns ( Alpha Nutrition, n.d. )

Loss of electrolytes i? taking to loss of energy and weakening of musculuss ( Alpha Nutrition, n.d. )

Vitamin lack i? doing anemia ( Alpha Nutrition, n.d. )

Micronutrient lack, wherein an inordinate sum of Zn is lost via micturition and Fe is non good absorbed by the GI system i? taking to Vitamin A lack ( Alpha Nutrition, n.d. )

These short-run effects can increase outgo by coercing an person to purchase the necessary nonprescription medicines or vitamin addendums to countervail the uncomfortableness caused by imbibing inordinate sums of intoxicant.

In the long-run there is besides the hazard of geting:

Liver harm, characterized by swelling due to acute poisoning, and overtime into a scarred and damaged liver that can no longer make its map ( Alpha Nutrition, n.d. )

Pancreatis, wherein there is inordinate pancreatic secernment i? taking to hapless digestion, hapless alimentary soaking up, and higher hazards of diabetes ( Alpha Nutrition, n.d. )

These long-run effects are much more risky to wellness and certainly, it will necessitate much more sophisticated medicine. Hence, medical outgo may increase due to ( but non limited to ) hospitalization, regular check-ups with a physician, and prescribed medicine.


Most of us are cognizant that smoke, in both the short term and the long-run, has legion disadvantages to our wellness. Therefore, it is a critical variable to mensurate our wellness status, and accordingly, how much more a family would hold to pass if one or more of its household members are tobacco users. The baccy ingestion variable in this survey is measured by the Peso value of all tobacco-related costs incurred by a individual Filipino family. It is assumed that higher baccy ingestion, the greater the consumption or exposure to tobacco ‘s risky elements ( i.e. ignoring the monetary value fluctuations between trade names ) .

It is worthwhile to advert excessively that there may be a clip slowdown between the purchases of baccy to the clip the single contracts a wellness job. Since the survey does non utilize time-series informations, we can non supervise how long this clip slowdown is until the medical disbursals rise in the undermentioned old ages. We hence must presume that the tobacco users in the family have been smoking before 2003, the twelvemonth the information was gathered, to be able to state that smoke has already contributed to the medical disbursals in 2003. Besides, smoke has short term effects that will instantly impact the family ‘s disbursals, even if the tobacco user ( s ) merely started in 2003. Listed below are some of these effects of smoke, as outlined by Martin in his article “ Health Risks of Smoking ” which will lend to the medical outgo of a family ( 2010 ) :

Eyesight harm such as macular devolution and cataracts, which both require surgery

Thyroid disease

Oral diseases such as gum infection ( peculiarly gingivitis ) , teeth stain, deteriorating sense of gustatory sensation, sore pharynx, and even malignant neoplastic disease of the lips, oral cavity, pharynx, voice box, and gorge.

Premature ripening of the tegument

Less effectual immune system – tobacco users are hence more susceptible to catching the common cold and other contagious diseases, taking to greater outgo in medical specialties and physician ‘s assignments.

Promotes osteoporosis, and degenerative phonograph record disease, every bit good as breaks in the hip and spinal column.

Some of the more drastic effects are to the respiratory system – smoke leads to lung malignant neoplastic disease, chronic bronchitis, emphysema, cough, pneumonia, asthma and TB.

Smoking can impact reproduction: in males, sperm cells are reduced in figure, motility, and can go distorted ; in females, smoking can worsen dysmenorrhoea and do early climacteric ; and for both males and females it can take to sterility.

Serious harm can besides be made to the circulatory system – weakened and blocked bosom arterias, which can later take to a bosom onslaught or even a shot. The opportunity of undertaking leukemia is besides higher. A diminished bosom can besides take to hapless blood circulation, which in itself will convey approximately uncomfortablenesss to the tobacco user ( e.g. ‘cold fingers ‘ esthesis )

Smoking leads to assorted sorts of malignant neoplastic diseases: liver, kidney, tummy, pancreas, colon, neck, and vesica malignant neoplastic disease. It can besides advance the physique up of tummy and duodenal ulcers, every bit good as aortal aneurism.

Addiction to smoke can besides hold a psychological consequence to the tobacco user. Quitting is hard for many, and some may choose to seek professional aid.

Furthermore, harmonizing to the Quit Smoking web site, there is “ about 5 million deceases a twelvemonth ” worldwide that can be attributed to smoke, so that in “ every 8 seconds person loses their life someplace in the universe ” ( Martin, 2010 ) . The short-run and long-run effects of smoking baccy listed above can besides later lead to other diseases and uncomfortablenesss in the portion of the tobacco user. For any of these instances, the person will be compelled to pass for intervention, showing the positive relation between baccy outgo and medical outgo.


First we will specify outgo on non-home cooked nutrient as the peso value of all nutrient bought from outside by a family. Food from exterior is inclusive of but is non limited to fast nutrient, processed nutrient merchandises, and street nutrients, which in the modern-day position, are well unhealthy. Therefore, this variable purposes to quantify whether the nutrient quality, and finally its beginning, has an consequence on wellness and later towards medical outgo.

In today ‘s fast paced lifestyle, people of all ages have become really familiar with fast nutrient and other processed merchandises because it is comparatively inexpensive and convenient as opposed to home-cooking and all right dining. Recent surveies and experimentations nevertheless have shown that inordinate ingestion has drastic effects on wellness, and given a given a more health-conscious society today, these findings had doubtless influenced nutrient picks of families around the universe. Harmonizing to Glenn Freiboth, a certified wellness adviser from Illinois, eating fast nutrient promotes fleshiness for several grounds: ( 1 ) fast nutrient merchandises provide a 65 % higher energy denseness ( sum of Calories in relation to a nutrient ‘s weight ) than a typical diet, doing one to eat more ; and ( 2 ) the calorie consumption of eating fast nutrient is twice every bit much as that of eating the same weight of a healthier opposite number like pasta ( Freiboth, 2010 ) . He states that “ nutrients with a high energy denseness confuse the encephalon ‘s control systems for appetite ” particularly since we gauge our ‘fullness ‘ in footings of part sizes, and therefore doing weight addition ( Freiboth, 2010 ) . Ideally, worlds were built to eat low energy denseness repasts and nutrient that is made up of fibre and more complex saccharides than the high in concentrated fat and less good saccharides normally found in fast nutrient.

Furthermore, processed and fast nutrient merchandises lead to other serious and long-run unwellnesss. A survey done by the Veterans Administration Medical Center ( San Francisco ) , as cited by Freiboth, reveals that a type of fat known as oxidised fat, which is present in fast nutrient, can rush up plaque accretion and obstructions in arterias, taking to bosom disease ( 2010 ) . Fast nutrient ingestion is besides linked to diabetes, harmonizing to a Lancet medical diary survey as cited by USA Today, because regular fast nutrient feeders tend to derive 10 lbs more than less frequent feeders, doing them two times more vulnerable to insulin abnormalities ( USA Today, 2004 ) .

However, it is of import to observe that the variable “ nutrient from outside/non-home cooked nutrient ” is non limited to unhealthy processed and fast nutrient merchandises merely. It can besides include nutrient from eating houses that are healthy and characteristic of a balanced diet. Therefore, higher outgo in nutrient from exterior does non needfully increase medical outgo, as nutrient bought from exterior may really be good to one ‘s wellness. The information does non let us to divide the two variables, and hence, we have to see this individual variable from two positions.


Marketing specializers around the universe stress the importance of market cleavage by age, sex, income, among other demographic factors. Using the construct in a similar mode, it can likely be deduced that medical outgo varies between age groups. Biologically talking, as we grow older, our organic structure deteriorates and becomes less efficient in its maps, doing us more susceptible to a assortment of diseases. Harmonizing to the British Medical Journal, “ physical capacity extremums in immature maturity and so declines increasingly decennary by decennary at a rate which varies from one person to another ” ( McMurdo, 2000 ) . Even with a healthy life style, aging is still associated with “ a dramatic loss of musculus mass and musculus strength ” that by the clip one turns 80 old ages old, one-half of the musculus strength had dissipated ( McMurdo, 2000 ) . This statistic besides varies depending on one ‘s lifestyle – whether it is healthy or non, and if sufficient exercising and a balanced diet is practiced. Therefore, exposure to diseases is non merely dependant on age, but besides on the individual ‘s manner of life.

Furthermore, on the societal side of things, different age groups tend to see health care otherwise. For illustration, the young person may see fittingness in athleticss and seek medical attention merely when necessary, whilst 50+ twelvemonth olds seek medical attention on a regular basis. In Andre and Velasquez ‘s words, “ the wellness of the immature can be ensured by comparatively inexpensive preventative steps such as exercising plans and wellness instruction, the medical conditions of the aged are frequently complicated, necessitating the usage of expensive engineerings and interventions ” ( n.d. ) . Basically, this comes down to the demands of each age group, and in this survey we hypothesize that by virtuousness of biological differences, the higher the age, the more health care demanded and the greater the medical outgo.


Many of us likely have this impression that if one has a higher educational attainment, he/she is more cognizant of health care processs, and is hence more precautional and willing to prosecute in medical outgo to decrease the hazard of acquiring ill. However, those who are incognizant can endure much more to a great extent subsequently on, and incur even greater medical disbursals. An alternate position is that person with higher educational attainment may besides be wealthier, and so through the thought that higher income=higher medical outgo, we might anticipate that person to pass more on health care excessively. In this survey, nevertheless, we will seek to demo the family caput ‘s educational attainment consequence on medical outgo, independent of the family ‘s income.

In this survey, the family caput ‘s educational attainment will be set as a silent person variable wherein 0 = no class completed, 1 = Elementary Undergraduate, 2 = Elementary Graduate, 3 = High School Undergraduate, 4 = High School Graduate, 5 = College Undergraduate, 6 = College Graduate, and 7 = Masteral or Doctorate degree alumnus. When we regress our theoretical account, we will be able to find a differential intercept that will demo the progressive alteration in medical outgo as the family caput ‘s educational attainment goes up by one degree.

In the yesteryear, several surveies had been made to deduce the relationship between health care outgo and instruction. For case, harmonizing to a survey by Alliance for Excellent Education, in the United States, “ persons with lower income, less instruction, and lower-status businesss and employment ( be given to ) have poorer wellness ” ( 2006 ) . This can possibly be attributed to the fact that those with lower instruction are less likely to see the importance of wellness insurance, so they are less willing to avail of a comprehensive program, or even any health care program. Consequently, these persons with no insurance receive less health care and when they contract a long-run disease, there is a greater opportunity that they do non have proper intervention and dice earlier than those who are insured ( Alliance for Excellent Education, 2006 ) . Furthermore, harmonizing to Muennig as cited by the Alliance for Excellent Education, those with low educational accomplishment are more susceptible to “ cardiovascular disease, malignant neoplastic disease, infection, lung disease, and diabetes ” ( 2006 ) . Once person in a family contracts any one of these diseases, it is certain that the family ‘s medical outgo will lift mostly and quickly.

Therefore, Muennig, as cited in Alliance for Excellent Education, asserts that there exists a negative relationship between educational attainment and medical outgo, at least in the United States ( i.e. as one ‘s educational attainment additions, the medical outgo lessenings ) . This is evidenced by Alliance for Excellent Education ‘s empirical survey that states that a pupil who graduates from high school can salvage an norm of “ $ 13,706 ( in 2005 dollars ) in Medicaid and expenditures for uninsured attention ” throughout his life-time, as opposed to one who drops out from high school ( 2006 ) . To exemplify this construct, allow us look at the undermentioned graph.

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Graph 1: Empirical Evidence from Alliance for Excellent Education ‘s Study

As we can see in the graph above, the highest medical outgo is experienced by the uninsured high-school dropouts, the lowest educational attainment nowadays in this graph. Conversely, the smallest medical outgo was incurred by college alumnuss who are Medicaid insurance receivers in the United States.

However, it is of import to observe that this survey was conducted in the United States and does non needfully use to the Philippines, which is merely a underdeveloped state. The ambiguity on the consequence of instruction on medical outgo remains as Filipinos with small educational attainment may choose non to pay for medical outgo, and alternatively live in ignorance of their wellness demands. This is particularly true in a destitute society like ours, where people live in subsistence – and wherein they would instead pass the small money they have on nutrient and other necessities instead than on health care. Ultimately, we can merely estimate a typical Filipino family ‘s behavior towards medical outgo by look intoing upon the informations available to us.


Sum uping the information we have gathered in the old subdivision, Review of Related Literature, the tabular array below outlines the description of each variable, every bit good as the grounds why each variable is important in this survey.




Growth Rate of Medical Outgo

( lnmedexp )

Percentage alteration in the peso value of entire disbursement per family on medical attention

The growing rate of medical outgo is the dependent variable of this theoretical account. The growing rate is a better step of the propensities of Filipino families with respects to healthcare than the additive version because lnmedexp specifically shows the per centum addition or lessening in the medical outgo needed given that a family consumes an extra unit of intoxicant, for case.

Household Income

( pay )

Peso value of wages and rewards earned, per family, from agricultural and non-agricultural activities.

Changes in family income will necessarily act upon medical outgo because it is the ultimate beginning of disposable income of every family.

Alcohol Outgo

( intoxicant )

Peso value of entire disbursement on alcoholic drinks

Alcohol is one factor that can qualify the life style of a family. Since intoxicant is scientifically proven to hold negative effects to wellness, it is likely to act upon the sum of income allotted to healthcare.

Tobacco Outgo

( baccy )

Peso value of entire disbursement on baccy or coffin nails

There is much cogent evidence that baccy is eventful to one ‘s wellness, and so if it is portion of one ‘s life style, in clip it will certainly take to a demand for medical intervention.

Non-Home Cooked Food Consumption

( foodout )

Peso value of all nutrients or repasts bought from eating houses, nutrient stables, etc.

Food bought from exterior can be really unhealthy, peculiarly if it is processed nutrient. Frequent purchases can therefore ache one ‘s wellness, and later alter medical demands.

Household Head Age

( hhage )

Age of the family caput at clip of interview

Certain age groups are more wellness witting than others – and this will reflect on the family ‘s medical outgo. Since the family caput acts as a leader, household members are bound to be affected by the degree of wellness concern of the ‘leader ‘ .

Household Head Highest Level of Education Attained

( hheduc )

Highest grade degree completed by family caput at clip of interview

Dummy variable wherein a value of:

0 = No Grade Completed

1 = Elementary Undergraduate

2 = Elementary Graduate

3 = High School Undergraduate

4 = High School Graduate

5 = College Undergraduate

6 = College Graduate

7 = Masteral or Doctorate degree alumnus

Education means consciousness of wellness concerns – and more frequently than non, the family caput ‘s thoughts will be echoed by the remainder of the household. This can do the family more cautious and this would change how often the household would avail of medical services.



Summary of Data

Using stata, we can deduce a drumhead tabular array ( shown below ) that enlists each variable ‘s figure of observations, mean, standard divergence, and minimal and maximal values.

Table 1 – Stata Generated Summary Table of Variables

The regressors pay, intoxicant, baccy, foodout, hhage, and hheduc each have 151031 observations, which is good above the needed 30 observations to fulfill the Central Limit Theorem. Similarly the regressand, lnmedexp has 139083 observations, which is sufficient to fulfill one of the critical premises in the Ordinary Least Squares arrested development method.

The mean values in this tabular array can besides be used to estimate the typical outgos and ingestion wonts of Filipino families. On mean Filipino families are willing to pass PHP 3226.13 for health care in a twelvemonth, out of their mean one-year pay of PHP 56888.29. That is about 5.67 % of family rewards. On norm, households spend more on eating out ( PHP 3383 ) than medical outgo ( PHP 3226.13 ) . The mean Filipino family besides allocates rather a batch on frailties – PHP 1334.34 for baccy and PHP 900.53 for intoxicant. Furthermore, the mean family caput age is 47, and the mean highest educational attainment is merely simple alumnus.

The sum-up tabular array besides shows us the scattering of informations – as represented by the standard divergence. The divergences are instead big, particularly for rewards with a standard divergence of PHP 90386.47. This reflects upon our society, which has a immense disparity in income distribution. Social inequality besides becomes apparent in the other outgos, as some families can pass 1000s more from the norm on medical specialties, nutrient from exterior, intoxicant and baccy, whilst others can pass 1000s less from the norm on these merchandises. The comparatively big standard divergence for family caput ‘s age, 12 old ages, besides shows that our informations set touches upon several age groups or coevalss. This can hold legion deductions on how we will construe the consequences of the regressed theoretical account.

Last, the lower limit and maximal values amplify the societal inequality nowadays in the Philippines. For case, some families earn nil, whilst others earn PHP 2.4 million. Besides the instruction variable reveals that our informations set contains household caputs with zero educational attainment, and those who graduated a Masteral or Doctorate grade. The broad assortment of family features present in this information set intimations that the sample taken by the National Statistics Office is random, and sufficiently dependable to stand for the full state.

A-priori Expectations




Household Income

( pay )


Higher income leads to a higher medical outgo, given that health care is seen as a luxury good. Higher income besides means that the family can apportion a bigger per centum to healthcare. Therefore, this will ensue to positive growing in medical outgo.

Alcohol Consumption

( intoxicant )


Alcohol has legion drawbacks to wellness that will necessitate intervention, hence higher intoxicant ingestion means higher medical outgo. Therefore, this will ensue to positive growing in medical outgo.

Tobacco Consumption

( baccy )


Smoking baccy is risky to wellness and the diseases it will do will necessitate intervention. Therefore, higher outgo on baccy would take to higher medical outgo. Further, this will ensue to positive growing in medical outgo.

Non-home cooked nutrient ingestion

( foodout )


If we presume that most of the nutrient bought from exterior is from unhealthy fast nutrient ironss and nutrient shop, so there exists a positive relation between this variable and medical outgo as unhealthy nutrient will take to wellness complications overtime. However, if most of the nutrient bought from outside is of the healthy assortment, so there exists a negative relation between this variable and medical outgo, because the healthy nutrient will decrease the demand for medical intervention. Therefore, this will ensue to a positive or negative growing in medical outgo, depending on the state of affairs.

Household Head Age

( hhage )


Older persons are more susceptible to illness as their organic structures are non every bit strong as it used to be. The degree of wellness consciousness besides tends to turn as one gets older. Therefore, the higher the age of the family caput, the higher the medical outgo. Therefore, this will ensue to positive growing in medical outgo.

Household Head Highest Educational Attainment

( hheduc )


A higher educational attainment would intend that the person is more cognizant of assorted wellness perpetrators, and hence may prosecute in precautional disbursement on health care ( e.g. purchase vitamin addendums, help of wellness insurance ) . This would intend a positive relation between educational attainment and medical outgo. Nevertheless, greater consciousness could besides intend that the person would take better attention of him/herself and hence require less medical intervention – a negative relation between the variables. Therefore, this will ensue to positive or negative growing in medical outgo, depending on which state of affairs prevails, under Philippine context.

Therefore the estimated arrested development theoretical account utilizing the above a-priori outlooks will be:

lnmedexp = I?1 + I?2wage + I?3alcohol + I?4tobacco + ( +/- ) I?5foodout + I?6hhage + ( +/- ) I?7hheduc


The Regression Model: Estimated Valuess

By utilizing Stata ‘s “ reasoning backward ” map, the arrested development tabular array below was derived.

Table 2 – Stata-Generated Regression Table

Hence, the estimated arrested development theoretical account is:

lnmedexp = 1.990656 + 0.00000329wage + 0.0001064alcohol + 0.0000355tobacco + 0.0000163 foodout + 0.0535704hhage + 0.4341043hheduc

Regression Model Interpretation


We can infer a batch about the arrested development theoretical account merely by looking at the overall significance of the theoretical account, as represented by the p-value of the F-test. The overall F-test implies a void hypothesis that the independent variables have no corporate significance and has zero consequence on the dependant variable, whereas the alternate hypothesis provinces that at least one of the independent variables has an consequence on the dependant variable. In the Stata-generated tabular array above, the F-test has a extremely important p-value of 0.0000, which serves as grounds to reject the void hypothesis. This means that at least one of the regressors have an consequence on the regressand.

The r-squared value, on the other manus, is a step of ‘goodness of tantrum, ‘ or instead, how good the independent variables explain the dependant variable. The adjusted r-squared value on the other manus is a fluctuation of the r-square that adjusts for the extra variables in the theoretical account ( i.e. r-square of course increases as we add another variable, but its adjusted version merely increases when the extra variable has extra explanatory power ) . Results show an indistinguishable r-squared and adjusted r-squared value of 0.3622, intending that our theoretical account for medical outgo explains 36.22 % of the existent universe state of affairs with respects to Filipino families ‘ health care disbursals.


To further confirm our analysis of the arrested development theoretical account, we must prove for the single significance of the Betas generated per independent variable, by looking at the t-tests ‘ p-values. In the theoretical account, all of the p-values of the independent and independent variables are extremely important at p=0.0000, which serves as grounds against the void hypotheses that the Beta ‘s are equal to 0. In kernel, the p=0.000 proves that each of our independent variables have an consequence upon the dependant variable.

If wage=alcohol=tobacco=foudout=hhage=0 and hheduc=0 ( meaning that the caput of the family has non completed any grade degree ) , the independent value of lnmedexp is 1.990656. Therefore, the ‘base ‘ value of the growing of medical outgo is 632.03 % given zero rewards, zero expenses on intoxicant, baccy, and non-home cooked nutrient, a newly-born family caput ( when age=0 ) with zero educational attainment. Its extremely important p-value of 0.000 besides rejects the void hypothesis of I?1 = 0, meaning that there is a changeless degree of medical outgo.

On the other manus, a PHP 1.00 addition in rewards will take to a 0.000329 per centum point addition in lnmedexp, and a 0.000329 % addition in medical outgo ( medexp ) , keeping all other variables constant. A PHP 1.00 addition in alcohol outgo ( intoxicant ) will ensue to a 0.01064 per centum point addition in lnmedexp, and a 0.010640566 % addition in medexp, ceteris paribus. A PHP 1.00 addition in tobacco outgo ( baccy ) will take to a 0.00355 per centum point addition in lnmedexp, and a 0.003550063 % addition in medexp, ceteris paribus. An extra PHP 1.00 spent on nutrient bought from outside ( foodout ) will ensue to a 0.00163 per centum point addition in lnmedexp, and 0.001630013 % alteration in medexp, keeping all other variables constant. An extra twelvemonth of age, on the other manus, leads to a 5.35704 per centum point addition in lnmedexp, and 5.503126335 % ( ( ( e^0.0535704 ) -1 ) *100 ) addition in medexp, ceteris paribus.

Furthermore, the arrested development theoretical account states that the differential intercept of the family caput ‘s instruction sums to 0.4341043. Therefore, as the family caput degrees up his/her instruction by one notch ( refer to the tabular array in Theoretical Framework ) , lnmedexp additions by 0.4341043 units, and medexp additions by 54. 35798551 % ( ( e^.4341043 ) -1 *100 % ) .



In the Ordinary Least Squares ( OLS ) arrested development method, it is critical that we satisfy non-multicollinearity to guarantee that OLS remains the best linear indifferent calculator. By definition, non-multicollinearity is a desirable instance wherein a zero correlativity exists among the regressors or the independent variables. To forestall go againsting this critical premise, we must prove for the presence of the progressive but unsafe type of multicollinearity – wherein the independent variables are non absolutely related but their close relation is sufficient to belie the arrested developments and the readings made after.

A authoritative symptom of multicollinearity is an unnecessarily high R-squared value with really few important regressors. Fortunately, in this theoretical account, all of the independent variables are important, and the r-squared and adjusted r-squared are indistinguishable and is non excessively high at 36.22 % . The indistinguishable adjusted and non adjusted r-squared is a good thing because it means that the explanatory power of the theoretical account is non attributable to adding more variables, but instead to how good the regressors truly explain the regressand.

To prove for multicollinearity in Stata, we use the “ vif ” bid, which stands for the discrepancy rising prices factor trial – where the ideal VIF value should non transcend 10. Using stata, we get:

VIFj = 1 / ( 1- Rij2 )

Table 3: Stata-Generated VIF Test

The tabular array above shows that there is no multicollinearity in this arrested development theoretical account as no VIF & gt ; 10 for any variable. It is besides utile to look at Rij2, which measures the additive relationship of one regressor against the other regressors – and therefore it should be minimized. Following the expression for VIF above, we find that 1/VIF is equal to 1- Rij2 i? a value that should be maximized to demo that there is no unsafe multicollinearity nowadays. The 1/VIF values above are comparatively big, therefore turn outing that this theoretical account does non go against the critical premise of non-multicollinearity.


Another critical premise to guarantee that OLS is bluish is homoscedasticity, which is when there is equal discrepancy of mistakes between observations. Therefore it is indispensable to prove for heteroscedasticity, its antonym, which can enlarge the impact of type 1 and 2 mistakes and falsify the standard mistakes generated per variable. In Stata, we can prove this by utilizing the White ‘s trial, as shown below:

Table 4: Stata-Generated White ‘s Trial

As evidenced by the tabular array above, the arrested development theoretical account suffers from heteroscedasticity as its p-value for heteroskedasticity is extremely important at p=0.0000, coercing us to reject the void hypothesis of homoscedasticity. Therefore, we must regress once more utilizing the robust option to rectify the standard mistakes, as such:

Table 5: Stata-Generated Robust Arrested development

Comparing Table 5 with Table 1 ( original arrested development ) , we can see that the standard mistakes had been corrected for each variable, and therefore discrepancies between observations are now equal, bring arounding the heteroscedasticity nowadays in the theoretical account. Using the robust option besides did non change the coefficients, and hence the arrested development theoretical account is still:

lnmedexp = 1.990656 + 0.00000329wage + 0.0001064alcohol + 0.0000355tobacco + 0.0000163 foodout + 0.0535704hhage + 0.4341043hheduc


Exogeneity is another critical premise of the OLS method that states that the residuary term ( the stochastic perturbation term or U ) must hold zero correlativity with its matching independent variables. Mathematically, it is the premise that states E [ ui|xi ] = 0. In kernel, we are proving whether the variables we failed to include in our theoretical account are in anyhow correlated to the independent variables we identified. In stata, we can prove this by correlating the residuary term generated against all the independent variables, as shown below:

Table 6: Stata-Generated Table For Testing Exogeneity

As evidenced by the tabular array above, we can see that there is rigorous exogeneity between the stochastic perturbation term and the independent variables as the residuary term ( the last row ) shows a nothing value for all the independent variables. Alternatively, it can be said that the variables we failed to account for has no relation with the 1s that were identified in the theoretical account.


Since the theoretical account had been tested for several critical premises like non-multicollinearity, homoscedasticity, and exogeneity, and had been corrected for misdemeanors, it can be said that the arrested development theoretical account is indifferent and adequately valid to pull economic readings from. There were no alterations in the coefficients when we corrected for the misdemeanors, and so the concluding theoretical account remains as:

lnmedexp = 1.990656 + 0.00000329wage + 0.0001064alcohol + 0.0000355tobacco + 0.0000163 foodout + 0.0535704hhage + 0.4341043hheduc

In drumhead, our theoretical account states that:

If pay, the outgo on intoxicant, baccy, and non-home cooked nutrient is zero and the family caput has age=0 and has non completed any grade degree, medical outgo has a basal growing rate of 632.03 % .

A PHP 1.00 addition in rewards will take to a 0.000329 % addition in medical outgo ( medexp ) , keeping all other variables constant.

A PHP 1.00 addition in alcohol outgo ( intoxicant ) will ensue to a 0.010640566 % addition in medexp, ceteris paribus.

A PHP 1.00 addition in tobacco outgo ( baccy ) will take to a 0.003550063 % addition in medexp, ceteris paribus.

An extra PHP 1.00 spent on nutrient bought from outside ( foodout ) will ensue to a 0.001630013 % alteration in medexp, keeping all other variables constant.

An extra twelvemonth of age, on the other manus, leads to a 5.503126335 % addition in medexp, ceteris paribus.

The family caput ‘s educational attainment has a differential intercept of 0.4341043. A one degree addition in instruction leads to an addition of 54.35798551 % in medexp.


Medical outgo among Filipino families varies for an mixture of grounds. Certain facets of life style, such as a family ‘s inclination to indulge in unhealthy lifestyle wonts like imbibing intoxicant, smoke, and frequent eating out can hold an impact on the sum of health care services demanded by a family. In our survey, we found that the more intoxicant, baccy and non-home cooked nutrient are consumed the higher the medical outgo, which is mostly because these are harmful addictive activities that will take to many sorts of diseases. Income from rewards and wages can besides impact a family ‘s willingness to avail of healthcare – particularly if health care is seen as a luxury good, and non a precedence. Furthermore, different age degrees require different sorts of medical attending, but there is a tendency that as one gets older, the higher the medical outgo will be. Last, instruction of the family caput will reflect upon the ingestion picks of the remainder of the family members. In the Filipino society, we have besides concluded with our arrested development theoretical account that the positive relation between instruction and medical outgo prevails, and therefore, it is possibly true that the more educated you are, the more cautious you are and more willing to put in health care ( e.g. one-year cheque up, regular consumption of vitamin addendums ) . Whereas, lower instruction denotes ignorance and coupled with the possibility of low income, the family may choose non to acquire medical intervention at all.

So what are the deductions of these in our society? First of wholly, this survey highlights the demand for Filipinos to cut down ingestion of habit-forming and risky goods like intoxicant and baccy in order to salvage more for merchandises and services that are more good to one ‘s public assistance. The authorities should besides concentrate on supplying inexpensive and low-cost health care to the age groups that are in greatest demand of it, every bit good as families that are low in income but require medical support. After all, better health care for all could intend a stronger and more efficient work force, which can take to economic growing. One possible policy that could be made to guarantee just health care distribution is in farther subsidising public infirmaries and funding community development plans. Making so may pave the manner for a much more just and economically successful society.