A quality-adjusted cost function in a regulated industry: The case of Dutch nursing homes

被引:9
作者
Blank J.L.T. [1 ,2 ]
Eggink E. [1 ]
机构
[1] Social and Cultural Planning Office, 2500 BD The Hague
关键词
Cost function efficiency; Nursing homes; Quality adjustment;
D O I
10.1023/A:1011496832304
中图分类号
学科分类号
摘要
The primary objective of this paper is to examine the cost structure of the Dutch nursing home industry, using econometric techniques. In this paper we present a model that combines economic behaviour and quality of services measured by a latent variable. We propose a simple method for identifying and estimating cost functions in the presence of endogenous, unobserved quality. Estimating this quality-adjusted cost function and the corresponding cost share equations indicates that quality is negatively related to the input prices of nurses and other personnel, indicating that nursing homes have a preference for labour. We also show that the quality-adjusted model is superior to a model with exogenous quality. © 2001 Kluwer Academic Publishers.
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页码:201 / 211
页数:10
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