The risks and dynamics of health care expenditures in urban China: An illustration in Kunshan City

Guan Gong, Hongmei Wang, Lingli Xu

Research output: Contribution to journalArticle


This paper examines the individual financial risk of health care expenditures over time in urban China, using longitudinal health expenditure data from 2005 to 2007 in Kunshan City, Jiangsu Province, China. We find that the stochastic process of log total health care expenditures is well represented by the sum of an AR(3) process and a white noise process. Simulating this model, we find that the urban health insurance system protects enrollees from the risk of catastrophic health care expenditures by bearing the majority of the health care expenditures. However, out-of-pocket health care expenditures represents a considerable risk to an individual's financial status.

Original languageEnglish (US)
Pages (from-to)634-660
Number of pages27
JournalFrontiers of Economics in China
Issue number4
Publication statusPublished - Dec 20 2014



  • China
  • financial risk
  • out-of-pocket expenditures
  • urban health insurance system

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this