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Public Procurement and Non-contractible Quality: Evidence from Elderly Care

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Author Info

  • Bergman, Mats A.

    ()
    (Södertörns högskola Institutionen för samhällsvetenskaper)

  • Lundberg, Sofia

    ()
    (Department of Economics, Umeå University)

  • Spagnolo, Giancarlo

    ()
    (Stockholm School of Economics)

Abstract

Many quality dimensions are hard to contract upon and are at risk of degradation when the service is procured rather than produced in-house. On the other hand, procurement may foster performance-improving innovation. We assemble a large data set on elderly care services in Sweden for the 1990-2009 period, including survival rates, our measure of non-contractible quality, and indicators of subjectively perceived quality of service. We estimate the effects of municipalities’ decision to procure rather than produce in-house on non-contractible quality using a difference-in-difference approach and controlling for a number of other potential determinants. The results indicate that procurement significantly increases non-contractible quality as measured by survival rate, reduces the cost per resident but does not affect subjectively perceived quality.

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Bibliographic Info

Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 846.

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Length: 51 pages
Date of creation: 06 Sep 2012
Date of revision:
Handle: RePEc:hhs:umnees:0846

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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
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Web page: http://www.econ.umu.se/
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Related research

Keywords: incomplete contracts; privatization; procurement; quality; elderly care; mortality; outsourcing; nursing home; performance measurement;

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