NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Altruism, Rivalry and Crowding-Out in the Nonprofit Firm's Supply of Charity Services: The Case of Hospitals

Richard G. Frank, David S. Salkever

NBER Working Paper No. 2753 (Also Reprint No. r1665)
Issued in October 1988
NBER Program(s):   HE

This paper extends previous research on Individuals' supply of charitable donations to the behavior of nonprofit firms. Specifically, we study provision of charity care by private, nonprofit hospitals. We demonstrate that In the absence of large positive income effects on charity care supply, convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals. Extending our model to include patient heterogeneity and impure altruism (rivalry) provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant. Empirical analysis of data for hospitals in Maryland provides strong evidence of rivalry on the supply of outpatient plus inpatient charity care, but not when the analysis is confined to inpatient care.

download in pdf format
   (291 K)

download in djvu format
   (195 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2753

Published: "The Supply of Charity Services by Nonprofit Hospitals: Motives and Market Structure." From Rand Journal of Economics, Vol. 22, No. 3, pp. 430-445, ( Autumn 1991).

Users who downloaded this paper also downloaded* these:
Heutel w15004 Crowding Out and Crowding In of Private Donations and Government Grants
Malani, Philipson, and David Theories of Firm Behavior in the Nonprofit Sector. A Synthesis and Empirical Evaluation
Horwitz and Nichols w13246 What Do Nonprofits Maximize? Nonprofit Hospital Service Provision and Market Ownership Mix
Lakdawalla and Philipson w6377 Nonprofit Production and Competition
Dague, DeLeire, Friedsam, Kuo, Leininger, Meier, and Voskuil w17009 Estimates of Crowd-Out from a Public Health Insurance Expansion Using Administrative Data
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us