Nonprofit and for-profit providers in Japanfs at-home care industry: evidence on quality of service and household choice
AbstractIn 2000, government deregulation along with the introduction of the long-term insurance scheme allowed for-profit providers of at-home care for the elderly to compete directly with nonprofit operators. According to the contract failure hypothesis, we would expect consumers to prefer nonprofit providers over their for-profit counterparts as a result of information asymmetry and non-distributional constraints. We take advantage of household level data to examine whether householdsf choice of care provider is biased toward nonprofits. We find that nonprofit providersf larger market share is at least partly explained by having operated in the market longer and by continuing restrictions in medical and institutional care that confer various advantages on nonprofit providers. However, we do find that user with better knowledge of providers tend to favor for-profit providers, suggesting that measures to reduce information asymmetries may help to provide a more level playing field.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 9 (2005)
Issue (Month): 3 ()
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asymmetry of information;
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- L8 - Industrial Organization - - Industry Studies: Services
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