Predictably Unpredictable Inspections

Ashvin Gandhi, Andrew Olenski and Maggie Shi

No 34491, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Inspections are a common tool for acquiring information and incentivizing compliance. Though typically unannounced, they often follow a predictable schedule. We study how this predictability shapes firm effort and patient outcomes in U.S. nursing homes. Nursing homes “slack” in the low-risk period following an inspection and ramp up effort as their next inspection approaches. Patient survival mirrors this pattern, suggesting meaningful consequences for care quality. We embed these estimates in a dynamic model capturing how inspection regimes incentivize effort and reveal quality. Unpredictability induces as much additional effort as increasing inspection frequency by 10%, with minimal loss of informational value.

JEL-codes: I18 L51 (search for similar items in EconPapers)
Date: 2025-11
New Economics Papers: this item is included in nep-hea
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