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The determinants of care home closure

Allan, Stephen, Forder, Julien (2015) The determinants of care home closure. Health Economics, 24 (S1). pp. 132-145. ISSN 1057-9230. E-ISSN 1099-1050. (doi:10.1002/hec.3149) (KAR id:46279)


This study investigates the causes of full closure of care homes in the English care home/nursing home market. We develop theoretical arguments about two causes for closure that are triggered by errors or external shocks: poor economic sustainability and regulatory action. Homes aiming to operate with lower quality in the market are argued for a number of reasons to be more susceptible to errors/shocks in setting quality, especially negative errors, leading to an empirical hypothesis that observed quality should negatively affect closure chance. In addition, given quality, homes facing relatively high levels of local competition should also have an increased chance of closure.

We use a panel of care homes from 2008 and 2010 to examine factors affecting their closure status in subsequent years. We allow for the potential endogeneity of home quality, and use multiple imputation to replace missing data.

Results suggest that homes with comparatively higher quality and/or lower levels of competition have less chance of closure than other homes. We discuss that the results provide some support for the policy of regulators providing quality information to potential purchasers in the market.

Item Type: Article
DOI/Identification number: 10.1002/hec.3149
Uncontrolled keywords: care homes, long-term care, closures, market, elderly
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Division for the Study of Law, Society and Social Justice > School of Social Policy, Sociology and Social Research > Personal Social Services Research Unit
Depositing User: Stephen Allan
Date Deposited: 23 Dec 2014 12:09 UTC
Last Modified: 10 Dec 2022 04:22 UTC
Resource URI: (The current URI for this page, for reference purposes)

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