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The Role of Donations in Quality Disclosure: Evidence from Nonprofit Nursing Homes Full Access

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  • Susan F. Lu

    (Purdue University)

Abstract

This paper uses a quality disclosure policy--the Nursing Home Quality Initiative, which mandates the public reporting of quality information on selected dimensions--to investigate how nonprofit nursing homes react to economic incentives. The study finds that nonprofits are as responsive as for-profits to quality disclosure: quality improves along the reported dimensions and diminishes along the unreported ones. Further tests show that nonprofits may respond to donations and fail to mimic for-profits when competing with them. These findings suggest that donor response may be the motive for nonprofits to respond to quality disclosure in the same way as for-profit alternatives.

Suggested Citation

  • Susan F. Lu, 2016. "The Role of Donations in Quality Disclosure: Evidence from Nonprofit Nursing Homes Full Access," American Journal of Health Economics, MIT Press, vol. 2(4), pages 431-462, Fall.
    • Handle: RePEc:tpr:amjhec:v:2:y:2016:i:4:p:431-462
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    Cited by:

    1. Jones, Daniel B. & Propper, Carol & Smith, Sarah, 2017. "Wolves in sheep’s clothing: Is non-profit status used to signal quality?," Journal of Health Economics, Elsevier, vol. 55(C), pages 108-120.
    2. Lauren Xiaoyuan Lu & Susan Feng Lu, 2022. "Does Nonprofit Ownership Matter for Firm Performance? Financial Distress and Ownership Conversion of Nursing Homes," Management Science, INFORMS, vol. 68(7), pages 5127-5145, July.
    3. Aaron K. Chatterji & Jiao Luo & Robert C. Seamans, 2021. "Categorical Competition in the Wake of Crisis: Banks vs. Credit Unions," Organization Science, INFORMS, vol. 32(3), pages 568-586, May.
    4. Susan F. Lu & Huaxia Rui, 2018. "Can We Trust Online Physician Ratings? Evidence from Cardiac Surgeons in Florida," Management Science, INFORMS, vol. 64(6), pages 2557-2573, June.
    5. Sean Shenghsiu Huang & John R. Bowblis, 2019. "Private equity ownership and nursing home quality: an instrumental variables approach," International Journal of Health Economics and Management, Springer, vol. 19(3), pages 273-299, December.
    6. Susan F. Lu & Huaxia Rui & Abraham Seidmann, 2018. "Does Technology Substitute for Nurses? Staffing Decisions in Nursing Homes," Management Science, INFORMS, vol. 64(4), pages 1842-1859, April.
    7. Wilson, Nicholas, 2018. "Altruism in preventive health behavior: At-scale evidence from the HIV/AIDS pandemic," Economics & Human Biology, Elsevier, vol. 30(C), pages 119-129.
    8. Susan Feng Lu & Konstantinos Serfes & Gerard Wedig & Bingxiao Wu, 2021. "Does Competition Improve Service Quality? The Case of Nursing Homes Where Public and Private Payers Coexist," Management Science, INFORMS, vol. 67(10), pages 6493-6512, October.

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    More about this item

    Keywords

    nonprofit; quality disclosure; donation; teaching-to-the-test;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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