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Do Agglomeration Economies Exist in the Hospital Services Industry

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Author Info
Laurie J. Bates (Bryant University)
Rexford E. Santerre () (University of Connecticut)

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Abstract

Given the importance of knowledge flows and the continued emphasis on face-to-face encounters especially for medical care, close proximity of hospitals may be essential for the efficient delivery of medical care. That is, hospital productivity might be greater where hospitals cluster and allow knowledge to more easily and quickly disperse among personnel in the various organizations. To add to the understanding about agglomeration economies in the hospital services sector, this study analyzes how the clustering of hospitals in the various metropolitan areas of the US affects industry wide productivity. The multiple regression analysis is conducted on a cross-sectional basis for both 1993 and 1999 and by using first differencing of the data between the two years. The observed productivity improvements resulting from the clustering of hospitals provides yet another justification for encouraging a larger number of hospitals in metropolitan areas.

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File URL: http://college.holycross.edu/eej/Volume31/V31N4P617_628.pdf
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Publisher Info
Article provided by Eastern Economic Association in its journal Eastern Economic Journal.

Volume (Year): 31 (2005)
Issue (Month): 4 (Fall)
Pages: 617-628
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:eej:eeconj:v:31:y:2005:i:4:p:617-628

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Keeler, Theodore E & Ying, John S, 1996. "Hospital Costs and Excess Bed Capacity: A Statistical Analysis," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 470-81, August. [Downloadable!] (restricted)
  2. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 577-615, May. [Downloadable!] (restricted)
  3. Henderson, J. Vernon, 1986. "Efficiency of resource usage and city size," Journal of Urban Economics, Elsevier, vol. 19(1), pages 47-70, January. [Downloadable!] (restricted)
  4. Gaspar, Jess & Glaeser, Edward L., 1998. "Information Technology and the Future of Cities," Journal of Urban Economics, Elsevier, vol. 43(1), pages 136-156, January. [Downloadable!] (restricted)
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  5. Escarce, JoseJ., 1996. "Externalities in hospitals and physician adoption of a new surgical technology: An exploratory analysis," Journal of Health Economics, Elsevier, vol. 15(6), pages 715-734, December. [Downloadable!] (restricted)
  6. Phelps, Charles E, 1992. "Diffusion of Information in Medical Care," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 23-42, Summer. [Downloadable!] (restricted)
  7. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  8. Rexford E. Santerre & Debra Pepper, 2000. "Survivorship in the US hospital services industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 181-189. [Downloadable!]
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