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Buyer power and price discrimination: the case of the UK care homes market

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  • Hancock, Ruth
  • Hviid, Morten

Abstract

UK Local Authorities purchase care home places on behalf of a large group of people following a means test of their income and wealth. All other buyers of care home services are atomistic. The care home market is characterised by a large number of small providers. Local authorities may thus have buyer power. We show that any abuse of this buyer power may lead to some people, the squeezed middle not being served. We quantify the size of the squeezed middle and assess the implications of the form of the means test for local authorities ability to exercise buyer power.

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Bibliographic Info

Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2010-39.

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Date of creation: 13 Dec 2010
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Publication status: published
Handle: RePEc:ese:iserwp:2010-39

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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Postal: Publications Office, Institute for Social and Economic Research, University of Essex, Wivenhoe Park, Colchester, Essex CO4 3SQ UK
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Cited by:
  1. Ruth Hancock & Juliette Malley & Raphael Wittenberg & Marcello Morciano & Linda Pickard & Derek King & Adelina Comas-Herrera, 2013. "The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England," LSE Research Online Documents on Economics 43154, London School of Economics and Political Science, LSE Library.

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