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Nonprofit and for-profit providers in Japanfs at-home care industry: evidence on quality of service and household choice

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Author Info

  • Satoshi Shimizutani

    ()
    (Institute of Economic Research, Hitotsubashi University)

  • Haruko Noguchi

    ()
    (Toyo Eiwa University)

Abstract

In 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 householdsf choice of care provider is biased toward nonprofits. We find that nonprofit providersf 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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File URL: http://www.accessecon.com/pubs/EB/2005/Volume9/EB-04I10001A.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 9 (2005)
Issue (Month): 3 ()
Pages: 1-13

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Handle: RePEc:ebl:ecbull:eb-04i10001

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Keywords: asymmetry of information;

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References

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  1. Olivia S. Mitchell & John Piggott & Satoshi Shimizutani, 2004. "Aged-Care Support in Japan: Perspectives and Challenges," NBER Working Papers 10882, National Bureau of Economic Research, Inc.
  2. Gertler, Paul J., 1989. "Subsidies, quality, and the regulation of nursing homes," Journal of Public Economics, Elsevier, vol. 38(1), pages 33-52, February.
  3. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
  4. Shimizutani, Satoshi & Suzuki, Wataru, 2007. "Quality and efficiency of home help elderly care in Japan: Evidence from micro-level data," Journal of the Japanese and International Economies, Elsevier, vol. 21(2), pages 287-301, June.
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Cited by:
  1. Noguchi, Haruko & Shimizutani, Satoshi, 2009. "Supplier density and at-home care use in Japan: Evidence from a micro-level survey on long-term care receivers," Japan and the World Economy, Elsevier, vol. 21(4), pages 365-372, December.
  2. Satoshi Shimizutani, 2006. "Japan's Long-term Care Insurance Program: An Overview," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(V), pages 23-28.

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