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Pricing and Rationing by Nonprofit Organizations with Distributional Objectives

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  • Richard Steinberg
  • Burton A. Weisbrod

Abstract

The growing commercial activities of nonprofit charities, hospitals, educational institutions, arts organizations, day-care centers, nursing homes, and religious organizations have led many to question the legitimacy of the nonprofit designation and the concomitant tax and regulatory advantages conferred upon the sector. If nonprofit organizations are engaging in commercial activity, it is easy to regard them as simply for-profits-in-disguise. However, there are many varieties of commercial activity. This chapter focuses on the ways in which nonprofit organizations and private firms can be expected to differ in their use of various pricing and other mechanisms through which their goods and services are distributed. Unlike for-profits, nonprofits may have a variety of distributional and other Ôbonoficing' objectives and they operate under different legal constraints. We illustrate a wide variety of ways in which distributional goals might be pursued, each suggesting a testable implication.

Suggested Citation

  • Richard Steinberg & Burton A. Weisbrod, "undated". "Pricing and Rationing by Nonprofit Organizations with Distributional Objectives," IPR working papers 97-28, Institute for Policy Resarch at Northwestern University.
    • Handle: RePEc:wop:nwuipr:97-28
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    Cited by:

    1. Nava Ashraf & James Berry & Jesse M. Shapiro, 2010. "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia," American Economic Review, American Economic Association, vol. 100(5), pages 2383-2413, December.
    2. Steinberg, Richard & Weisbrod, Burton A., 2005. "Nonprofits with distributional objectives: price discrimination and corner solutions," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2205-2230, December.
    3. Steffen Burchhardt & Christoph Starke, 2010. "Target-Group and Quality Decisions of Inequity-Averse Entrepreneurs," FEMM Working Papers 100011, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    4. Catharine B. Hill & Gordon C. Winston & Stephanie A. Boyd, 2005. "Affordability: Family Incomes and Net Prices at Highly Selective Private Colleges and Universities," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 769-790.
    5. Clive Belfield & Celia Brown & Hywel Thomas, 2002. "Workplaces in the Education Sector in the United Kingdom: How do they Differ from those in Other Industries?," Education Economics, Taylor & Francis Journals, vol. 10(1), pages 49-69.
    6. Kanika Kapur & Burton A. Weisbrod, 2000. "The Roles of Government and Nonprofit Suppliers in Mixed Industries," Public Finance Review, , vol. 28(4), pages 275-308, July.
    7. Mair, Johanna & Noboa, Ernesto, 2003. "Emergence of social enterprises and their place in the new organizational landscape, The," IESE Research Papers D/523, IESE Business School.
    8. Christoph Starke, 2010. "Serving the Many or Serving the Most Needy?," FEMM Working Papers 100002, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.

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