Multitasking, Information Disclosure and Product Quality: Evidence from Nursing Homes

47 Pages Posted: 25 Feb 2009 Last revised: 16 Mar 2010

See all articles by Susan F. Lu

Susan F. Lu

Purdue University - Krannert School of Management

Date Written: February 10, 2009

Abstract

This paper uses a quality mandatory disclosure policy, the Nursing Home Quality Initiative (NHQI), to investigate how quality "report cards" affect firms' choices of multidimensional product quality. I show that after the introduction of NHQI: (1) the proportion of effort allocated to unreported dimensions decreases; (2) quality improves insignificantly along the reported dimensions, but deteriorates along the unreported ones; (3) there is no evidence that nursing homes increase quality-related inputs. These findings are consistent with the multitasking hypothesis that, rather than increasing effort for quality improvement, firms may respond to information disclosure by reallocating effort across dimensions of quality.

Keywords: Multitasking, Information Disclsoure, Quality

JEL Classification: L15, I18, L20

Suggested Citation

Lu, Susan Feng, Multitasking, Information Disclosure and Product Quality: Evidence from Nursing Homes (February 10, 2009). Simon School Working Paper No. FR 09-03, Available at SSRN: https://ssrn.com/abstract=1340578 or http://dx.doi.org/10.2139/ssrn.1340578

Susan Feng Lu (Contact Author)

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

HOME PAGE: http://https://sites.google.com/site/susanluhome/home

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