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Technical efficiency in texas nursing facilities: A stochastic production frontier approach

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  • Kris Knox

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  • Eric Blankmeyer
  • J. Stutzman
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    Abstract

    A rapidly aging U. S. population is straining the resources available for long term care and increasing the urgency of efficient operations in nursing homes. The scope for productivity improvements can be examined by estimating a stochastic frontier production function. We apply the methods of maximum likelihood and quantile regression to a panel of Texas nursing facilities and infer that the average productivity shortfall due to avoidable technical inefficiency is at least 8 percent and perhaps as large as 20 percent. Non-profit facilities are notably less productive than comparable facilities operated for profit, and the industry has constant returns to scale. Copyright Springer 2007

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    Bibliographic Info

    Article provided by Springer in its journal Journal of Economics and Finance.

    Volume (Year): 31 (2007)
    Issue (Month): 1 (March)
    Pages: 75-86

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    Handle: RePEc:spr:jecfin:v:31:y:2007:i:1:p:75-86

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    1. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, April.
    2. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    3. Nyman, John A & Bricker, Dennis L, 1989. "Profit Incentives and Technical Efficiency in the Production of Nursing Home Care," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 586-94, November.
    4. Erlandsen,E. & Forsund,F.R., 1999. "Efficiency in the provision of municipal nursing- and home-care services : the Norwegian experience," Memorandum 32/1999, Oslo University, Department of Economics.
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    Cited by:
    1. Per J. Agrell & Mehdi Farsi & Massimo Filippini & Martin Koller, 2013. "Unobserved heterogeneous effects in the cost efficiency analysis of electricity distribution systems," Working Papers 0038, Swiss Economics.
    2. Mamatzakis, E & Koutsomanoli-Filippaki, Anastasia & Pasiouras, Fotios, 2012. "A quantile regression approach to bank efficiency measurement," MPRA Paper 51879, University Library of Munich, Germany.
    3. Joël, Marie-Eve & Sibille, Romain, 2013. "Education and career path of French nursing home managers : impact on their human resources practices," Economics Papers from University Paris Dauphine 123456789/11700, Paris Dauphine University.
    4. Knox, Kris Joseph & Blankmeyer, Eric C. & Trinidad, José A. & Stutzman, J.R., 2009. "Predicting bankruptcy in the Texas nursing facility industry," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 1047-1064, August.
    5. Galina Besstremyannaya, 2014. "The efficiency of labor matching and remuneration reforms: a panel data quantile regression approach with endogenous treatment variables," Working Papers w0206, Center for Economic and Financial Research (CEFIR).

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