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

45 Pages Posted: 9 Nov 2011 Last revised: 3 Sep 2015

See all articles by Susan F. Lu

Susan F. Lu

Purdue University - Krannert School of Management

Date Written: August 31, 2015

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. I find 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.

Keywords: nonprofit, quality disclosure, donation, teaching-to-the-test, mimicking

JEL Classification: L31, L15, I18, L33, L51

Suggested Citation

Lu, Susan Feng, The Role of Donations in Quality Disclosure: Evidence from Nonprofit Nursing Homes (August 31, 2015). Available at SSRN: https://ssrn.com/abstract=1956689 or http://dx.doi.org/10.2139/ssrn.1956689

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
169
Abstract Views
1,052
rank
214,254
PlumX Metrics