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Short-Term Economic Impact of Rural Hospital Closures

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  • Manlove, Jacob
  • Whitacre, Brian

Abstract

Many rural hospitals across the United States are being forced to shut their doors, leading to questions about effects on local economies. This paper uses average treatment effects and difference in differences methodology to quantify the short-term impacts of closures, focusing on variables such as income, poverty, unemployment, home values, and shifts in industry employment. The likelihood of a hospital closure in a county was estimated and these propensity scores were then used to match the 43 counties that experienced a rural hospital closure with ‘otherwise similar’ counties whose hospitals did not close. Results suggest that recent rural hospital closures significantly impact many economic variables as well as creating shifts in occupations and industry.

Suggested Citation

  • Manlove, Jacob & Whitacre, Brian, 2017. "Short-Term Economic Impact of Rural Hospital Closures," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252716, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea17:252716
    DOI: 10.22004/ag.econ.252716
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    References listed on IDEAS

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    2. Ona, Lucia Y. & Hudoyo, Agus & Freshwater, David, 2007. "Economic Impact of Hospital Closure on Rural Communities in Three Southern States: A Quasi-Experimental Approach," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(2), pages 1-10.
    3. Dehejia, Rajeev, 2005. "Practical propensity score matching: a reply to Smith and Todd," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 355-364.
    4. Guido W. Imbens, 2004. "Nonparametric Estimation of Average Treatment Effects Under Exogeneity: A Review," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 4-29, February.
    5. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    6. Miller, Cristina & Nikaj, Silda & Pender, John, 2015. "Impacts of Hospital Closures on Rural Housing Values in Illinois," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205546, Agricultural and Applied Economics Association.
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    Cited by:

    1. Kritee Gujral & Anirban Basu, 2019. "Impact of Rural and Urban Hospital Closures on Inpatient Mortality," NBER Working Papers 26182, National Bureau of Economic Research, Inc.

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