The benefits of not living in a nursing home

Robert Brent

Applied Economics, 2022, vol. 54, issue 32, 3740-3750

Abstract: We identify and value four categories of benefits of not living in a nursing home (NH). The four categories relate to the two components of a Quality Adjusted Life Year (QALY), which is the outcome effect for this evaluation. For each QALY component, the quality of a life year foregone and the loss of a life, NHs have a direct effect and an indirect effect as NHs increase dementia symptoms. Estimates of the QALY components are obtained from two fixed effects regression equations applied to a large national data set with quality of life and dementia symptoms as dependent variables. Valuation of the QALY effects is based on the value of a statistical life year literature. Because every category of QALY effect produces negative benefits, a fifth category of foregone benefits is the savings from not incurring expenses for a NH. The total losses are large, equal to $1.93 trillion.

Date: 2022
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DOI: 10.1080/00036846.2021.1983141

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