Private Equity, Consumers, and Competition: Evidence from the Nursing Home Industry

Ashvin Gandhi, YoungJun Song and Prabhava Upadrashta

No 34306, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how product market competition shapes the impact of private equity (PE) acquisitions on consumers. We examine nursing home buyouts and observe that PE-owned facilities exhibit greater competitive sensitivity: competing more aggressively when competitive incentives are strong and exploiting market power more aggressively when competitive incentives are weak. We find that PE-owned facilities are more sensitive to local market competition—even when comparing effects only across facilities purchased as part of the same acquisition—and are more responsive to a pro-competitive policy helping consumers compare facilities. This suggests that the competitive sensitivity of acquirers and the concentration of markets where acquisitions occur are important factors contributing to the effects of a merger, as well as that pro-competitive polices can reshape the effects of PE ownership on consumers.

JEL-codes: G3 G32 G34 G38 I1 I11 I18 L1 L11 L15 (search for similar items in EconPapers)
Date: 2025-10
Note: AG CF EH IO PR
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