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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

Suggested Citation

  • 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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    Citations

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    Cited by:

    1. Bonatti, Luigi, 2008. "Cultural relativism and ideological policy makers in a general equilibrium model with for-profit and non-profit enterprises," Research in Economics, Elsevier, vol. 62(1), pages 1-15, March.
    2. Luigi Brighi & Paolo Silvestri, 2016. "Inefficiency in Childcare Production.Evidence from Italian Microdata," Department of Economics 0079, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    3. Boyce, John R. & Hollis, Aidan, 2005. "Governance of electricity transmission systems," Energy Economics, Elsevier, vol. 27(2), pages 237-255, March.
    4. Luigi Brighi & Paolo Silvestri, 2016. "Inefficiency in Childcare Production. Evidence from Italian Microdata," Center for Economic Research (RECent) 117, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    5. Luigi Brighi & Paolo Silvestri, 2016. "Inefficiency in Childcare Production.Evidence from Italian Microdata," Center for the Analysis of Public Policies (CAPP) 0135, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
    6. H. Naci Mocan, 1995. "The Child Care Industry: Cost Functions, Efficiency, and Quality," NBER Working Papers 5293, National Bureau of Economic Research, Inc.
    7. Dominique Haughton & Swati Mukerjee, 1995. "The economic measurement and determinants of diversity," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 36(3), pages 201-225, November.
    8. 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.
    9. Barry T. Hirsch & David A. Macpherson & Anne E. Preston, 2018. "Nonprofit wages: theory and evidence," Chapters, in: Bruce A. Seaman & Dennis R. Young (ed.), Handbook of Research on Nonprofit Economics and Management, chapter 8, pages 146-179, Edward Elgar Publishing.
    10. Swati Mukerjee & Ann Witte, 1993. "Provision of child care: Cost functions for profit-making and not-for-profit day care centers," Journal of Productivity Analysis, Springer, vol. 4(1), pages 145-163, June.
    11. Luigi Brighi & Paolo Silvestri, 2019. "Inefficiency in Childcare Production: Evidence from Italian Microdata," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 5(1), pages 103-133, March.
    12. Sergio Destefanis & Ornella W. Maietta, 2015. "Property rights and efficiency in the care sector. Evidence from Italy," Journal of Entrepreneurial and Organizational Diversity, European Research Institute on Cooperative and Social Enterprises, vol. 4(2), pages 98-115, February.
    13. Vidar Ringstad & Knut Loyland, 1998. "Cost-Optimal Scale of Child Care Institutions," Journal of Productivity Analysis, Springer, vol. 10(3), pages 305-311, November.

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