Ownership and Quality in Markets with Asymmetric Information: Evidence from Nursing Homes

Avner Ben-Ner (), Karaca-Mandic Pinar () and Ting Ren
Additional contact information
Karaca-Mandic Pinar: University of Minnesota - Twin Cities

The B.E. Journal of Economic Analysis & Policy, 2012, vol. 12, issue 1, 33

Abstract: The ownership and governance of for-profit (FP), nonprofit (NP), and local government (LG) organizations are different. Therefore, the objectives of these different types of organizations and their performance may differ. We conjecture that in markets where there is substantial asymmetric information between providers and customers, FP firms, LG organizations and NP organizations provide similar levels of quality attributes that are observable to their customers and are well understood by them. However, FP firms are likely to provide lower levels of less-well observed and less-well understood desirable but costly quality attributes than their NP and LG counterparts. Using a rich dataset, we study the quality of outcomes for Minnesota nursing homes, which do not compete on prices. We find support for our theoretical conjectures: FP homes provide lower quality on a number of dimensions, especially those that are less observable by nursing home residents and their families.

Keywords: ownership; quality; asymmetric information; nursing homes; for-profit firms; non-profit organizations; local government organizations (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://doi.org/10.1515/1935-1682.3038 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

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:bpj:bejeap:v:12:y:2012:i:1:n:42

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/1935-1682.3038

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().