Economic factors and psychiatric hospital beds – an analysis of historical trends

Purpose - The purpose of this paper is to explore the association between economic factors (consumer price index, real gross domestic product per capita, base discount rate, and rate of unemployment) and numbers of hospital psychiatric beds. Design/methodology/approach - Time series analytical techniques (unit root and cointegration tests) were applied to two regional data sets from the nineteenth century (North Carolina, USA; Berkshire, UK) and three national data sets in the twentieth century (US; UK; Italy) to test the hypothesis of a relationship. Findings - All data sets suggest a long‐run relationship between economic factors and psychiatric bed numbers. Increase of consumer price predicted a decrease of hospital beds (and vice versa) in all data sets and was the strongest predictor of changes in psychiatric bed numbers. Hence, economic factors appear to be an important driver for the supply of hospital beds. Research limitations/implications - Cointegration tests are not true causality tests as they only measure the ability to forecast the value of anXvariable knowing the value ofNother variables. Therefore, one cannot rule out that the relationship between economic factors and psychiatric hospital beds is an indirect one, caused by another unidentified factor. Also, this study alone does not provide evidence to decide whether economic factors mainly influence demand or supply, although various findings suggest the latter. Practical implications - CPI is of particular significance for changes in psychiatric bed provision, and co‐integration tests are a useful method to explore such association. Originality/value - This study is the first one to apply time series analytical techniques to explore the role of economic factors in the processes of psychiatric institutionalisation and deinstitutionalisation.