Market share and price in dutch home care: Market power or quality?

Abstract

Summary: The paper uses unique data on contracts concluded by providers of home care to evaluate the effect of provider market power on prices of home care services in the Netherlands. Since, at least in some regions, one or two providers dominate the market, there are concerns about the effect of providers' market power on the pricing of home care services. Using data on contracted prices and quantities for 2004-2006, we find that providers with a larger market share are able to contract at a higher price. The effect remains after controlling for quality. © The Author(s) 2010.