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The determinants of exit from institutions and the price elasticity of institutional care: Evidence from Japanese micro-level data

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  • Noguchi, Haruko
  • Shimizutani, Satoshi

Abstract

This study examines how the price mechanism affects the length of residents' at institutions and their destination after exit. Using micro-level data from The Survey on Care Service Providers compiled by the Japanese government, we show that the price elasticity of the hazard of exit was 1.7 from welfare care facilities was 1.8 from health care facilities. Moreover, our estimates reveal that a 1 percentage point increase in copayments leads to an increase in the probability of returning home by 0.04% for residents of welfare care facilities and 3.7% for those of health care facilities and a decrease in the probability of being re-hospitalized by 3.3% for residents of health care facilities and 1.9% for those of medical care facilities. Our findings demonstrate that an appropriate price policy may work well to shorten clients' length of stay and to reduce the number of the socially institutionalized.

Suggested Citation

  • Noguchi, Haruko & Shimizutani, Satoshi, 2011. "The determinants of exit from institutions and the price elasticity of institutional care: Evidence from Japanese micro-level data," Journal of the Japanese and International Economies, Elsevier, vol. 25(2), pages 131-142, June.
    • Handle: RePEc:eee:jjieco:v:25:y:2011:i:2:p:131-142
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    1. Liliana E. Pezzin & Peter Kemper & James Reschovsky, 1996. "Does Publicly Provided Home Care Substitute for Family Care? Experimental Evidence with Endogenous Living Arrangements," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 650-676.
    2. Olivia S. Mitchell & John Piggott & Satoshi Shimizutani, 2004. "Aged-Care Support in Japan: Perspectives and Challenges," NBER Working Papers 10882, National Bureau of Economic Research, Inc.
    3. Barry R. Chiswick, 1976. "The Demand for Nursing Home Care: An Analysis of the Substitution between Institutional and Noninstitutional Care," Journal of Human Resources, University of Wisconsin Press, vol. 11(3), pages 295-316.
    4. Alvin E. Headen Jr., 1993. "Economic Disability and Health Determinants of the Hazard of Nursing Home Entry," Journal of Human Resources, University of Wisconsin Press, vol. 28(1), pages 80-110.
    5. Alan M. Garber & Thomas E. MaCurdy, 1990. "Predicting Nursing Home Utilization among the High-Risk Elderly," NBER Chapters, in: Issues in the Economics of Aging, pages 173-204, National Bureau of Economic Research, Inc.
    6. Olivia S Mitchell & John Piggott & Satoshi Shimizutani, 2008. "An Empirical Analysis of Patterns in the Japanese Long-Term Care Insurance System," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(4), pages 694-709, October.
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    Cited by:

    1. Matthew A. COLE & Robert J R ELLIOTT & OKUBO Toshihiro & Eric STROBL, 2013. "The Future of Long-term Care in Japan," Discussion papers 13064, Research Institute of Economy, Trade and Industry (RIETI).
    2. Reo Takaku & Atsushi Yamaoka, 2019. "Payment systems and hospital length of stay: a bunching-based evidence," International Journal of Health Economics and Management, Springer, vol. 19(1), pages 53-77, March.

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