Relative economic efficiency in Texas nursing facilities: A profit function analysis

Kris Knox (), Eric Blankmeyer and J. Stutzman

Journal of Economics and Finance, 1999, vol. 23, issue 3, 199-213

Abstract: The purpose of this analysis is to examine the relative economic efficiency of profit-seeking versus nonprofit nursing facilities. A Cobb-Douglas profit function is used on cross-sectional data to determine the technical efficiency, price efficiency, and overall economic efficiency of Texas nursing facilities. Ownership form influences the profit level of the firm. Profit-seeking firms are more economically efficient than their nonprofit counterparts. Inclusion of price efficiency analyses reinforces profit-seeking firms’ superior technical efficiency. Additionally, nursing facilities are price takers in the output market as well as in resource markets, indicating effective industry regulation. Copyright Springer 1999

Date: 1999
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DOI: 10.1007/BF02757705

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