Determinants and Regional Interactions of Health Inflation: Evidence from Spatial Panel Data Analysis in Turkey

Health inflation, which refers to the persistent rise in the costs of healthcare goods and services, constitutes a substantial barrier to access to medical care. By exerting pressure on the public budget, health inflation has shown an upward trend in Turkey, particularly in recent years. This study aims to examine the factors influencing health inflation in Turkey’s NUTS-2 regions over the period 2011–2021 through the application of spatial panel data analysis. The study differentiates itself from previous research by addressing health inflation, which has received limited attention in the literature, and by emphasizing the selection of an appropriate spatial weight matrix in the spatial data analysis process. The analysis identified the fixed-effects spatial lag model with a queen contiguity weight matrix as the appropriate model. Among the explanatory variables included in the model, general inflation, the proportion of university graduates, and birth rates were found to increase health inflation, whereas the number of enterprises in the health sector, the number of hospital beds per 100.000 population, and the share of the young population were found to reduce it. Finally, evidence of positive spatial dependence points to regional interaction in relation to health inflation among Turkey’s NUTS-2 regions.