The Econometric SocietyEdited by: Marina Halac • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Jul, 2025, Volume 93, Issue 4
https://doi.org/10.3982/ECTA21016
p. 1225-1264
Liran Einav|Amy Finkelstein|Neale Mahoney
We develop a stylized model that allows us to estimate a value‐added measure for nursing homes (“SNFs”) which accounts for patient selection both into and out of a SNF. We use the model, together with detailed data on the physical and mental health of about 6 million Medicare SNF patients between 2011 and 2016, to estimate the value added for about 14,000 distinct SNFs. We document substantial heterogeneity in value added. Nationwide, compared to a 10th percentile SNF, a 90th percentile SNF is able to discharge a patient at the same health level almost a week sooner, or one quarter of the median length of stay. Heterogeneity in value added within a market is almost as large as it is nationwide. Our results point to the potential for substantial gains through policies that encourage reallocation of patients to higher‐quality SNFs within their market.
Liran Einav, Amy Finkelstein, and Neale Mahoney
This supplement contains material not found within the manuscript.
Liran Einav, Amy Finkelstein, and Neale Mahoney
The replication package for this paper is available at https://doi.org/10.5281/zenodo.15007635. The authors were granted an exemption to publish their data because either access to the data is restricted or the authors do not have the right to republish them. However, the authors included in the package a simulated or synthetic dataset that allows running their codes. The Journal checked the synthetic/simulated data and the codes for their ability to generate all tables and figures in the paper and approved online appendices. However, the synthetic/simulated data are not designed to reproduce the same results.
July 5, 2026
