Competition and Crowding-Out among Public, Non-Profit and For-Profit Organizations: Evidence from Outpatient Substance Abuse Treatment

Andrew Cohen (), Beth A. Freeborn and Brian McManus ()
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Andrew Cohen: Federal Reserve Board of Governors
Brian McManus: Olin School of Business, Washington University

No 52, Working Papers from Department of Economics, College of William and Mary

Abstract: U.S. markets for outpatient substance abuse treatment (OSAT) include clinics that are private for-profit, private non-profit, and public (i.e., government-run). We study the market structure of OSAT using recently-developed methods from the empirical industrial organization literature on equilibrium market structure in differentiated product markets. These methods allow us to describe OSAT clinics as heterogeneous in their objectives, their responses to exogenous market characteristics, and their responses to one another. We find that the presence of a public clinic in a market reduces the probability that a private clinic will also participate in the market, which is consistent with crowding-out between public and private provision of OSAT. Crowding out appears to be more prevalent in markets with larger white populations.

Keywords: discrete games; multiple equilibria; structural estimation; healthcare markets; substance abuse treatment; crowding out (search for similar items in EconPapers)
JEL-codes: C35 C72 H4 I1 L1 L3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-pbe
Date: 2007-05-04
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