Nonparametric analysis of returns to scale in the US hospital industry

Paul W. Wilson · Kathleen Carey

45 citations0/0 files storedJournal of Applied Econometrics

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Efficiency Analysis Using DEA Healthcare Policy and Management Healthcare Quality and Management

Abstract

Abstract This paper presents new estimates of scale economies for US hospitals. We show that the common translog specification of hospital costs is a misspecification, and employ nonparametric, local linear estimation with both continuous and discrete covariates. A bootstrap method is used to provide inferences regarding ray scale economies and expansion path scale economies for a large sample of hospitals covering 1984–1996. We find evidence of changes in the structure of hospital costs over the sample period, as well as evidence of locally optimal hospital sizes. Copyright © 2004 John Wiley & Sons, Ltd.

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1997Quadratic Engel Curves and Consumer Demand 2000A general methodology for bootstrapping in non-parametric frontier models 1981On the bias in flexible functional forms and an essentially unbiased form 1993Resolving the scale efficiency puzzle in banking 1996Economies of Scale and Scope at Large Commercial Banks: Evidence from the Fourier Flexible Functional Form 1986Estimating hospital costs 1982Unbiased determination of production technologies 1983A Comparison of the Performance of Three Flexible Functional Forms

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