Public Procurement and Non-contractible Quality: Evidence from Elderly Care

Mats A. Bergman (), Sofia Lundberg () and Giancarlo Spagnolo
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Mats A. Bergman: Södertörns högskola Institutionen för samhällsvetenskaper, Postal: S 141 89 Huddinge, Sweden

No 846, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: Many quality dimensions are hard to contract upon and are at risk of degradation when the service is procured rather than produced in-house. On the other hand, procurement may foster performance-improving innovation. We assemble a large data set on elderly care services in Sweden for the 1990-2009 period, including survival rates, our measure of non-contractible quality, and indicators of subjectively perceived quality of service. We estimate the effects of municipalities’ decision to procure rather than produce in-house on non-contractible quality using a difference-in-difference approach and controlling for a number of other potential determinants. The results indicate that procurement significantly increases non-contractible quality as measured by survival rate, reduces the cost per resident but does not affect subjectively perceived quality.

Keywords: incomplete contracts; privatization; procurement; quality; elderly care; mortality; outsourcing; nursing home; performance measurement (search for similar items in EconPapers)
JEL-codes: H57 I18 L33 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2012-09-06
New Economics Papers: this item is included in nep-age and nep-hea
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0846

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