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Is quality accreditation effective? Evidence from the childcare market

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  • Xiao, Mo

Abstract

The ineffectiveness of a quality accreditation mechanism can be attributed to the inability of the accreditation status to provide consumers with information they do not already possess. I present a structural model of demand allowing consumers to infer quality from both accreditation status and firm reputation. I then estimate this model to assess the effectiveness and the impact of the national accreditation system for childcare centers on consumer welfare. My results suggest that disregarding the endogeneity of firms' accreditation choices significantly underestimates the effectiveness of the accreditation system. However, on average consumers do not gain much information beyond what they have inferred from a firm's reputation. The estimates of structural parameters are then used to quantify the value of this information to consumers.

Suggested Citation

  • Xiao, Mo, 2010. "Is quality accreditation effective? Evidence from the childcare market," International Journal of Industrial Organization, Elsevier, vol. 28(6), pages 708-721, November.
  • Handle: RePEc:eee:indorg:v:28:y:2010:i:6:p:708-721
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    Citations

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    Cited by:

    1. Mihaela Schaar & Simpson Zhang, 2015. "A dynamic model of certification and reputation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 58(3), pages 509-541, April.
    2. Georg F. Camehl & Pia S. Schober & C. Katharina Spiess, 2017. "Information Asymmetries between Parents and Educators in German Childcare Institutions," Discussion Papers of DIW Berlin 1693, DIW Berlin, German Institute for Economic Research.
    3. Andrew T. Ching & Tülin Erdem & Michael P. Keane, 2013. "Learning Models: An Assessment of Progress, Challenges and New Developments," Economics Papers 2013-W07, Economics Group, Nuffield College, University of Oxford.
    4. Saak, Alexander E., 2016. "Delegation of quality control in value chains:," IFPRI discussion papers 1526, International Food Policy Research Institute (IFPRI).
    5. Saak, Alexander E., 2016. "The Value of Delegated Quality Control and Market Size with an Application to Kyrgyzstan Dairy," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235707, Agricultural and Applied Economics Association.
    6. repec:bla:jindec:v:65:y:2017:i:2:p:309-335 is not listed on IDEAS
    7. repec:eee:ecolet:v:163:y:2018:i:c:p:36-39 is not listed on IDEAS

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