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Efficiency, quality, and social externalities in the provision of day care: Comparisons of nonprofit and for-profit firms

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  • Anne Preston

Abstract

Efficiency comparisons of nonprofit and for-profit day care centers reveal that, in 1977, production functions of nonprofit and for-profit day care centers were similar. Cost levels were also similar for centers providing identical services. However, on average, nonprofit centers offered costlier services than for-profit centers. In the segment of the industry not subject to federal regulations, nonprofit centers offered services with higher social externalities than for-profit centers. In the federally regulated segment, nonprofit centers offered higher quality services than for-profit centers. Therefore the important difference in economic outcome of nonprofit and for-profit day care centers involved product selection rather than efficiency levels. Copyright Kluwer Academic Publishers 1993

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  • Anne Preston, 1993. "Efficiency, quality, and social externalities in the provision of day care: Comparisons of nonprofit and for-profit firms," Journal of Productivity Analysis, Springer, vol. 4(1), pages 165-182, June.
  • Handle: RePEc:kap:jproda:v:4:y:1993:i:1:p:165-182 DOI: 10.1007/BF01073472
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    References listed on IDEAS

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    Cited by:

    1. Boyce, John R. & Hollis, Aidan, 2005. "Governance of electricity transmission systems," Energy Economics, Elsevier, vol. 27(2), pages 237-255, March.
    2. David M. Blau & H. Naci Mocan, 2002. "The Supply Of Quality In Child Care Centers," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 483-496, August.
    3. Hirsch, Barry & Macpherson, David A. & Preston, Anne E., 2017. "Nonprofit Wages: Theory and Evidence," IZA Discussion Papers 10571, Institute for the Study of Labor (IZA).

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