This paper studies the effect of hospital ownership on treatment rates allowing for spatial correlation among hospitals. Competition among hospitals and knowledge spillovers generate significant externalities which we try to capture using the spatial Durbin model. Using a panel of 2342 hospitals in the 48 continental states observed over the period 2005 to 2008, we find significant spatial correlation of medical service treatment rates among hospitals. We also get mixed results on the effect of hospital ownership on treatment rates that depends upon the market structure where the hospital is located and which varies by treatment type.

Document Type

Working Paper


Spring 1-2014


Spatial Lag, Hospital ownership, Spillover Effects, Panel data, Medical Economics




Working Papers Series


Economics | Health Economics | Medicine and Health Sciences | Public Affairs, Public Policy and Public Administration

Additional Information

Working paper no. 165

Author Yin-Fang Yen acknowledges the support of Southwestern University of Economics and Finance Fundamental Research Funds.

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Creative Commons Attribution 3.0 License
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