The Demand for Nursing Home Care: An Analysis of the Substitution Between Institutional and Noninstitutional Care

This paper analyzes the demand for nursing home care for the aged. The cross-sectional analysis indicates a high price elasticity of demand (-2.2), and that the demand is greater the less capable are the aged of providing own care, the better the job opportunities of adult women, and the wealthier the SMSA. Utilization increased 67percentfrom 1963 to 1973,but 64 percentage points is attributable to changes in these demand shift variables. This casts doubt on the view that the growth in utilization was largely stimulated by changing public policies during the period.