Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry

Paul J Gertler and Donald Waldman ()

Journal of Political Economy, 1992, vol. 100, issue 6, 1232-56

Abstract: Proper evaluation of cost-quality trade-offs inherent in regulatory policy requires identifying the structure of production from the behavioral response of quality to the policy change. However, estimating the structure of production with endogenous quality is difficult because of both measurement problems and data availability. The authors develop a simple method for identifying and estimating cost functions in the presence of endogenous and unobserved quality. Using this method, they estimate that a quality-adjusted cost function for nursing homes treating quality as exogenous yields seriously misleading estimates of marginal cost and economies of scale. Copyright 1992 by University of Chicago Press.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (73)

Downloads: (external link)
http://dx.doi.org/10.1086/261859 full text (application/pdf)
Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JPE for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:v:100:y:1992:i:6:p:1232-56

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().