Three Essays on Competition, Quality and Public Policies

Résumé du livre

Abstract: This dissertation consists of three chapters on competition, quality and public policies. Chapter 1 simulates and analyzes counterfactual policies intended to improve the quality of care in the U.S. nursing home industry. Chapter 2 examines how minimum quality standards affect the quality of nursing care. Chapter 3 investigates the determinants of European and American monopolization law. In Chapter 1, I develop a dynamic model of entry and exit to analyze quality choice and oligopoly market structure in the nursing home industry. The model endogenizes the decision over quality. I employ a two-stage fixed effect estimation strategy to control for unobserved heterogeneity across markets. I compile a unique facility-level panel data set that covers approximately 80% of the counties in the U.S. from 1996 to 2005. I find significant heterogeneity in the competitive effects across market structures; nursing facilities of similar quality levels compete more strongly than dissimilar facilities. Sunk entry costs are extremely large and significant fixed adjustment costs govern quality adjustment behavior. This paper simulates and evaluates counterfactual policies intended to improve the quality of nursing care. In Chapter 2, I empirically examine the impact of minimum quality standards (MQS) on the quality of care in the nursing home industry. I use a panel-data selection model to correct for the endogeneity bias caused by the adoption of MQS. I find that MQS reduce the number of nursing care providers. Their impacts on the quality of care are mixed; standards for licensed nurses increase quality by 15.4 percent while standards for direct-care nurses decrease quality by 9 percent. This paper also discusses possible explanations for quality deterioration after the imposition of MQS. In Chapter 3, I construct empirical models to test two theories that explain what determines the enforcement of monopolization law. The demand-side theory--that the inverse correlation between the strength of monopoly law and trade dependency is due to a lack of demand from consumers--posits the existence of pressure from diffuse interest groups. The supply theory explains observed legislation as a function of the strength of concentrated interest groups. Our finding is inconsistent with the demand-side theory.