Presenter(s)

    Courtney E. Cady, David A. Christian

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    Description

    In recent years, an increasing portion of consumer expenditures on services is allocated to healthcare. The aging of the U.S. population, the Affordable Healthcare Act, and the rising per unit costs of hospital trips all have influenced this trend. In this study, we test the hypothesis that healthcare sector prices covary directly with consumer expenditures on healthcare services. Using regression analysis, we regress 5 Healthcare sector ETF's on Healthcare consumption expenditures. The ETF's are: (1) Healthcare Sector ETF (XLV), (2) Healthcare Equipment ETF (XHE), (3) Biotech ETF (XBI), (4) Pharmaceuticals ETF (XHP), and (5) Healthcare Services ETF (XHS). Quarterly data are used in the analysis and the time period is from 2004 - 2014. We expect b>0, t-statistics>2, and R2 is significantly different from zero.

    Publication Date

    4-9-2015

    Project Designation

    Independent Research

    Primary Advisor

    Trevor C. Collier

    Primary Advisor's Department

    Economics and Finance

    Keywords

    Stander Symposium project

    Disciplines

    Arts and Humanities | Business | Education | Engineering | Life Sciences | Medicine and Health Sciences | Physical Sciences and Mathematics | Social and Behavioral Sciences

    A Covariance Analysis of Consumer Healthcare Expenditures and Healthcare Sector Price Movements

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