Cost Functions, Efficiency, and Quality in Day Care Centers

Mocan, H

doi:10.2307/146430

Cited by 38 publications

(28 citation statements)

References 32 publications

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“…This is a comprehensive measure of total cost that treats all inputs as variable. Hence, the cost function we estimate is a long-run cost function, in contrast to the short-run cost function estimated by Mocan (1997) using the same data. We expect cost to be more inelastic with respect to quality in the long run than in the short run.…”

Section: Datamentioning

confidence: 81%

“…9 Mocan (1997) followed this approach, and we later examine the sensitivity of our results to this alternative approach. 10 We augmented the specification in equation (5) with fifteen characteristics of centers and four characteristics of the parents of the children served by the centers.…”

Section: Empirical Implementationmentioning

confidence: 99%

“…14 Additional descriptive information by state and profit status can be found in Mocan (1997) and Helburn (1995). Our measure of quality is a simple average of the quality of the two observed rooms in a center.…”

Section: Datamentioning

confidence: 99%

“…The quality of child care services in the United States is thought to be mediocre on average, particularly in comparison to the quality of care provided in other developed countries (Whitebook, Howes, & Phillips, 1990;Mocan, 1997;Bergmann, 1996). There is considerable interest among policymakers in finding ways to increase the quality of child care in the United States.…”

Section: Introductionmentioning

confidence: 99%

“…1 Until recently, little was known about these important issues in the child care market. Mocan (1995Mocan ( , 1997 provided the fist analysis of the cost-quality relationship for day care centers with results that are useful for public policy, including an estimate of the cost of increasing quality. We build on Mocan's analysis by estimating the supply function for quality.…”

Section: Introductionmentioning

confidence: 99%

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The Production of Quality in Child Care Centers

Blau¹

1997

The Journal of Human Resources

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Abstract-We use data from a sample of child care centers to estimate the relationships between cost and child care quality, and between revenue and quality. We use a measure of child care quality, designed by developmental psychologists, that is positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we estimate the objective functions of firms and compute the quality supply function. The results indicate that the supply of quality is moderately elastic with respect to price and the wages of child care center workers. Implications of the results for child care policy are discussed.

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Section: Datamentioning

confidence: 81%

Section: Empirical Implementationmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

The Production of Quality in Child Care Centers

Blau¹

1997

The Journal of Human Resources

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The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model

2000

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After the ten Regional Water Authorities (RWAs) of England and Wales were privatized in November 1989, the successor Water and Sewerage Companies (WASCs) faced a new regulatory regime that was designed to promote economic efficiency while simultaneously improving drinking water and environmental quality. As legally mandated quality improvements necessitated a costly capital investment programme, the industry's economic regulator, the Office of Water Services (Ofwat), implemented a retail price index (RPI)+K pricing system, which was designed to compensate the WASCs for their capital investment programme while also encouraging gains in economic efficiency. In order to analyse jointly the impact of privatization, as well as the impact of increasingly stringent economic and environmental regulation on the WASCs' economic performance, this paper estimates a translog multiple output cost function model for the period 1985-1999. Given the significant costs associated with water quality improvements, the model is augmented to include the impact of drinking water quality and environmental quality on total costs. The model is then employed to determine the extent of scale and scope economies in the water and sewerage industry, as well as the impact of privatization and economic regulation on economic efficiency. Copyright © 2000 John Wiley & Sons, Ltd.

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The nonprofit advantage: Producing quality in thick and thin child care markets

Cleveland

Krashinsky

2009

J Policy Anal Manage

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Nonprofit child care centers are frequently observed to produce child care which is, on average, of higher quality than care provided in commercial child care centers. In part, this nonprofit advantage is due to different input choices made by nonprofit centers-lower child-staff ratios, better-educated staff and directors, higher rates of professional development for staff. Nonprofit centers may have an additional productivity advantage, due to unmeasured staff motivation and abilities or to better management of the production of good-quality child care. However, where nonprofit and for-profit child care firms compete in the same local markets, we speculate that this extra advantage should only appear where demand is sufficiently “thick” to permit a quality differentiation strategy to be financially viable for nonprofits. We estimate the effect of nonprofit status on quality, controlling for differences in financial resources available to the center, differences in the clientele served, and differences in staff and center inputs. In this conventional examination, nonprofit status has a moderately positive impact on quality. However, when we account for the unobserved heterogeneity and separate markets into “thick” and “thin,” a particularly strong nonprofit advantage is found in thick markets, but no productivity advantage for nonprofits is found in thin markets. This finding suggests a clear role for nonprofit organizations in improving the cost-quality trade-off faced by parents, but also identifies the market conditions that affect the ability of nonprofit managers to employ this advantage. Â© 2009 by the Association for Public Policy Analysis and Management.

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Cost Functions, Efficiency, and Quality in Day Care Centers

Abstract: Using a new data set, this paper finds that

Cited by 38 publications

References 32 publications

The Production of Quality in Child Care Centers

The Production of Quality in Child Care Centers

The impact of privatization and regulation on the water and sewerage industry in England and Wales: a translog cost function model

The nonprofit advantage: Producing quality in thick and thin child care markets

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