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Does Mandatory Measurement and Peer Reporting Improve Performance?

Susanna Gallani (), Takehisa Kajiwara () and Ranjani Krishnan ()
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Susanna Gallani: Harvard Business School, Accounting and Management Unit
Takehisa Kajiwara: Kobe University - JapanKobe University - Japan
Ranjani Krishnan: Michigan State University

No 16-018, Harvard Business School Working Papers from Harvard Business School

Abstract: We examine the effect of mandated measurement and peer disclosure of new information on the persistence of performance improvements in a setting without performance incentives. Value of information (VOI) theory posits that information can improve the accuracy of posterior beliefs and thereby have a decision facilitating effect. These effects are more pronounced when the information is new versus an update. Using data from the Japanese National Hospital Organization, we analyze performance trends following regulation requiring standardized measurement and peer disclosure of absolute and relative patient satisfaction performance. After controlling for ceiling effects and regression to the mean, mandatory patient satisfaction measurement and peer disclosure introduce positive and significant mean shifts in performance with larger improvements for poorly performing hospitals. The largest positive effects occur when the information is new. Our study provides empirical evidence of the decision facilitating value of information without confound from its decision influencing value.

Keywords: Value of information; Patient Satisfaction; Mandatory performance measurement; Health care. (search for similar items in EconPapers)
JEL-codes: I10 L30 M14 M41 (search for similar items in EconPapers)
Date: 2015-08, Revised 2017-03
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