In this article, we have examined the relationship between public expenditure on health care and health status in Lesotho using an econometric technique-the error correction model. Three indicators of health status were used: life expectancy at birth (years), infant mortality rate (per 1,000 live births), and under-5 mortality rate (per 1,000). The results of our analyses provided evidence that in addition to public expenditure on health, the availability of physicians, female literacy, and child immunization are also important determinants of health status in Lesotho. Contrary to findings from earlier studies, our analyses also found income per capita to be an insignificant determinant of health status. The policy implications that emanate from this article are for the government of Lesotho to channel more resources to educating women, hiring more physicians, and increasing the number of children immunized per year. This will imply an increase in the share of public spending on health.

The financing of health care is a complex issue for policy makers. This is because high out-ofpocket payments on health care have been found to further impoverish the poor who have limited income to divide among basic necessities of which health care is one-catastrophic health expenditure (CHE). The Millennium Development Goals (MDGs) may be difficult to attain with high out-of-pocket payments by the poor; this is an issue of serious concern and highlights the need for the kind of analyses in this paper. The analysis used data collected by the Our results showed that in Botswana the proportion of households facing CHE at the 20% and 40% thresholds was 11% and 7% respectively, and the share of out-of-pocket health payment during the survey period was about 0.93%. For Lesotho the proportions of those facing CHE expenditure at the 20% and 40% thresholds were 3.22% and 1.25%, and the share of out-of-pocket payment in total monthly expenditure was 1.34%. Results from regression analyses suggest that having at least one senior member in the household imposes a higher risk for CHE for the household in Lesotho; for Botswana gender and education status of households head influence the probability of facing CHE. In designing health systems, policy makers need to ensure that households are not only able to access health services when needed, but that they are also protected from facing financial catastrophe by reducing out-of-pocket payments.

This paper investigates the long run relationship between health care expenditure and economic growth, using panel data for 14 Southern African Development Community (SADC) member countries over the period 1995-2012. The non-stationarity and cointegration properties between health expenditure per capita and GDP per capita were examined, controlling for cross section dependence and heterogeneity between countries. Our results suggest that health expenditure and GDP per capita are non-stationary and cointegrated. These findings seem to confirm the notion that health expenditure is non-discretionary-health is a necessary good-in the SADC region. The estimated income elasticity is below unity but higher than what was obtained for the OECD regional grouping. The policy implication of our result is that adequate health care service provision should be a key objective of governmental intervention in the SADC region.

This article analyzes the effect of production uncertainty on farmland allocation decisions between perennial and annual crops, focusing on a representative farmer's attitude toward risk. A dynamic stochastic optimization model that considers net planting—the difference between new plantings and removals of perennial crops that achieve full production cycle—is used. The effect of uncertainty on the representative farmer's decisions to increase or decrease perennial crops’ acreage, on the optimal path, is examined. Our results reveal that the response of optimal path of net planting to uncertainty related to perennial crop production is highly affected by the farmer's attitude toward risk. A risk‐averse or a low‐risk loving farmer tends to reduce land allocation to perennial crops under uncertainty, while a high‐risk loving farmer will do exactly the opposite. Also, due to disutility of farming, the farmer tends to reduce land allocation to perennial crops when prices are high enough for him to attain a desired income level expectation. One implication of this research is the need for mechanization—in sub‐Saharan countries in particular—that increases per‐acreage yield and output in semisubsistence agriculture.