do nonprofit and government nursing homes enter unprofitable markets i introduction nursing home care is provided in the united states by for profit private nonprofit and government organizations 1 these three organizational forms may compete directly in the same markets with either differentiated or nondifferentiated output or serve entirely separate markets an understanding of which organizational forms will provide the most effective care in a given set of circumstances requires knowledge of in what ways and to what extent the nature of health care provision varies across organizational forms in the context of a market economy in which profit maximizing firms are the default producers the natural question from a welfare perspective is whether consumer surplus would decline if government and nonprofit providers were replaced with for profit providers this study examines whether nonprofit and government nursing facilities expand access to nursing home care through an examination of patterns of nursing home entry in the rural united states i employ methods due to bresnahan and reiss 1990 to identify markets that are unlikely to be profitable for for profits to enter and then ask whether nonprofits and government nursing homes as a consequence of policies that lower their costs relative to for profits locate in these unprofitable markets equivalently if government and nonprofit nursing homes were to exit isolated markets could one reasonably expect that for profits would enter to replace them any evidence suggesting that they would not supports the argument that government and nonprofit nursing home care providers contribute positively to social welfare by expanding access to care in assessing potential differences in care provided by the different organizational forms the literature has focused largely on access and quality differentials two questions of interest naturally arise when studying access to care first is any care available in the market that is is there a nursing home second if care is available to some in the market is it available to all that is are nursing homes full or do they discriminate at the point of admission on the basis of wealth health status or other observable measures the second question has received more attention in the literature most studies of access to nursing home care for example reschovsky 1996 ettner 1993 and gertler 1992 presume the presence of a facility and ask to what extent prospective residents have access to the facility often focusing on individuals covered by medicaid relatively fewer focus on issues of access in isolated markets yu and bradford 1995 is an exception while this study limits its focus to the first question by analyzing isolated rural markets in the united states the methods used here in principle can be extended to focus on the second question as well in focusing on the question of access this analysis abstracts from potential differences in quality across organizational forms deferring to existing studies on the subject including grabowski and hirth 2003 hirth 1999 chou 2002 holtmann and ullmann 1991 and weisbrod 1988 the question of whether nonprofits enter unprofitable geographic markets has not been previously addressed in the nursing home industry or elsewhere the study closest in spirit to the present one is the analysis of nonprofit and for profit hospital location by norton and staiger 1994 in which the authors conclude that for profits tend to locate in better insured areas that is areas that are more likely to be more profitable than nonprofits do this study differs from norton and staiger in that it explicitly calculates market profitability for markets that for profits have entered and projects it for markets that for profits have not entered this analysis also complements the work of kapur and weisbrod 2000 by assessing whether government nursing homes serve unprofitable markets while their paper addressed the question of whether government nursing homes serve unprofitable patients

wolves in sheep s clothing is non profit status used to signal quality abstract why do many firms in the healthcare sector adopt non profit status one argument is that non profit status serves as a signal of quality when consumers are not well informed a testable implication is that an increase in consumer information may lead to a reduction in the number of non profits in a market we test this idea empirically by exploiting an exogenous increase in consumer information in the us nursing home industry we find that the information shock led to a reduction in the share of non profit homes driven by a combination of home closure and sector switching the lowest quality non profits were the most likely to exit our results have important implications for the effects of reforms to increase consumer provision in a number of public services

rapid economic growth with increasing returns to scale and little or no productivity growth total factor productivities for 28 korean manufacturing sectors were estimated jointly with markups scale economies and the capacity utilization rate using the short run generalized leontief cost function concavity conditions necessary for the cost function to be well behaved and consistent with a firm s optimizing behavior were imposed on the estimation by way of bayesian inference the study finds 1 the superiority of the short run equilibrium model over the long run model and of the short run generalized leontief cost function over the translog cost function 2 market imperfection 3 the existence of scale economies and 4 biases in the traditional tfp measures the study also suggests that a rapid growth of output is possible with negative tfp growth copyright 1995 by mit press

measuring true stock index value in the presence of infrequent trading based on the beveridge nelson 1981 decomposition of an arima process i present a measure of true stock index value that is not directly observable due to infrequent trading of stocks the technique is illustrated with daily observations of the russell 2000 index this new measure might well prove useful in studies of lead lag relationships between index derivatives and spot market and futures basis measurements

technical change markup divestiture and productivity growth in the u s telecommunications industry this paper examines the sources of productivity growth for the u s telecommunications industry from 1935 to 1987 these years encompass both the pre and post at t divestiture periods we formulate a structural model that accounts for both changes in the cost and the demand side of the industry we measure the contributions of aggregate demand information intensity of the economy price cost margins relative factor prices direct and indirect effects of technological progress and r d investment on total factor productivity tfp growth rate we show that tfp growth rate as conventionally measured is a seriously biased measure of rate of technical change in this industry

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

incentivizing better quality of care the role of medicaid and competition in the nursing home industry this paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition using data from pennsylvania i estimate the parameters of the model the findings indicate that nursing homes increase the quality of care measured by the number of skilled nurses per resident by 8 7 following a universal 10 increase in medicaid reimbursement rates in contrast i find that pro competitive policies lead to only small increases in skilled nurse staffing ratios suggesting that medicaid increases are more cost effective in raising the quality of care

the proper scope of government theory and an application to prisons when should a government provide a service in house and when should it contract out provision we develop a model in which the provider can invest in improving the quality of service or reducing cost if contracts are incomplete the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has however the private contractor s incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality the model is applied to understanding the costs and benefits of prison privatization

the effects of exports technical change and markup on total factor productivity growth evidence from singapore s electronics industry abstract this paper illustrates a new technique to measure the effect of export demand on the conventional tfp growth index at the industry level we apply the technique to singapore s electronics industry and find that rapid growth in exports accounts for most of the tfp growth in this industry

asymmetric information ownership and quality of care an empirical analysis of nursing homes theoretically when asymmetric information exists nonprofit organizations due to the attenuation of the property right provide better quality of service than do the for profits despite extensive theoretical examination of the behavior of nonprofits there has been very little empirical testing of the plausibility of these theories this article addresses the effect of ownership type on the quality of service in the nursing home industry an environment particularly conducive to identifying the existence of asymmetric information the study shows that the differences between for profit and nonprofit homes do become manifest when asymmetric information is present

the october 1987 s p 500 stock futures basis five minute changes in the s p 500 index and futures contract are examined over a ten day period surrounding the october 1987 stock market crash since nonsynchronous trading problems are severe in these data new index estimators are derived and used the estimators use the complete transaction history of all 500 stocks nonsynchronous trading explains part of the large absolute futures cash basis observed during the crash the remainder may be due to disintegration of the two markets even after adjustment for nonsynchronous trading the index displays more autocorrelation than does the futures and the futures leads the index

not for profit entrepreneurs abstract entrepreneurs who start new firms may choose not for profit status as a means of committing to soft incentives such incentives protect donors volunteers consumers and employees from ex post expropriation of profits by the entrepreneur we derive conditions under which completely self interested entrepreneurs opt for not for profit status despite the fact that this status limits their ability to enjoy the profits of their enterprises we also show that even in the absence of tax advantages unrestricted donations would flow to non profits rather than for profit firms because donations have more significant influence on the decisions of the non profits

consumer information and competition between nonprofit and for profit nursing homes this paper develops implications of arrow s hypothesis that nonprofit organizations are prevalent in health care because of quality uncertainty the model analyzes the ability of nonprofits to mitigate market failures created by asymmetric information in an environment characterized by potential competition from both explicitly for profit firms and for profits in disguise profit motivated firms who obtain nonprofit status in order to exploit the perceived trustworthiness of the nonprofit sector under certain conditions it is shown that nonprofit status can serve as a credible signal of quality and that nonprofits can decrease the underprovision of quality both by providing high quality services and indirectly via a spillover effect on quality in the for profit sector applicability to long term care and implications for empirical research and policy towards nonprofits in health care are discussed

does organizational ownership matter objectives of employees in public nonprofit and for profit nursing homes does organizational ownership matter for employees we conducted a discrete choice experiment to reveal employees objectives in for profit nonprofit and governmental nursing homes the results indicate that differences in objectives among nursing home staff are at least partially related to differences in ownership type more specifically we find that employees of public nursing homes are less extrinsically motivated than their for profit and nonprofit counterparts however the results also show that employees of for profit nonprofit and governmental nursing homes are trading off output quality and output quantity differently in line with the view that public providers of elderly care are pursuing a supplier of last resort objective function

public private mixed delivery and information effects this paper analyses public private mixed delivery of essential public services under price regulation a private firm may have lower production costs and can potentially provide a performance benchmark for a public firm a public firm may offer higher quality service and can reveal the production cost of the private firm to the regulator however this paper shows that public private mixed delivery does not always dominate public delivery or private delivery mixed delivery is optimal only when i the cost uncertainty of the private firm is large ii the managerial incentive problem of the public firm is large and iii the performances of the public and private firms are highly correlated

quality competition with profit constraints abstract firms in markets such as health care and education are often profit constrained due to regulation or their non profit status and they are often viewed as being altruistic towards consumers we use a spatial competition framework to study incentives for cost containment and quality provision by altruistic firms facing profit constraints if prices are regulated profit constraints lead to lower cost containment efforts but higher quality if and only if firms are sufficiently altruistic under price competition profit constraints reduce quality and cost containment efforts but lead to lower prices if and only if firms are sufficiently altruistic profit constrained firms cost containment efforts are below the first best while their quality might be too high or too low if prices are regulated profit constraints can improve welfare and be a complement or substitute to a higher regulated price depending on the degree of altruism

work and health after retirement a competing risks model with semiparametric unobserved heterogeneity competing risks models recognize that there may be more than one exit from a given state but they make the strong assumption that there is no correlation between unobserved heterogeneity components in each state here a competing risks model that uses a semiparametric method of estimation and controls for the correlation between unobserved heterogeneity components in each state is compared with a traditional competing risks model of exit from retirement the unobservable heterogeneity components of the competing risks are insignificantly positively correlated and the effects of policy relevant variables are changed somewhat copyright 1989 by mit press

precise and efficient computation of the beveridge nelson decomposition of economic time series abstract this note shows how the beveridge nelson decomposition of economic time series can be precisely computed without the necessity for truncating infinite sums the algorithm includes those of beveridge and nelson 1981 and miller 1988 as special cases for particular models correcting an error in the latter