The Effect of Health Expenditure on Human Development Index (HDI) in Iran, 2001–2014

Background and Objectives: The category of health is closely related to growth, comprehensive development, including economic development and human development. Health expenditure are important factors affecting economic growth. These expenditures can increase human development along with human resource and physical capital. The purpose of the present study was to determine the effect of health expenditures (public and private) on the Human Development Index (HDI).   Methods: The present study is a time series study, in which data related to health expenditures and human development index were collected in 2001 to 2014 time series. Then, using time series models in econometric and VAR self-regression econometrics, Granger causality techniques were analyzed.   Results: In this study, public health expenditure expenditures had a one-way relationship with adult literacy rate and its direction is from public health expenditures to adult literacy rate. Private health expenditures had a one-way relationship with adult literacy rates and its direction is from private health expenditures to adult literacy rate. There is also a bilateral relationship between public health expenditures and GDP per capita.   Conclusion: The results of the present study indicated that health expenditures have a significant effect on human development index. Given the important role of the private sector in providing and promoting community health, it is suggested that the government should pay special attention to this issue and through further efforts to provide credits, for both public and private sectors, improvent and promotion of the human development index, are provided.