Multitasking, Information Disclosure, and Product Quality: Evidence from Nursing Homes
Year: 2012
Type: article
Abstract: This paper uses a mandatory quality disclosure policy, the Nursing Home Quality Initiative (NHQI), to investigate how quality ‘report cards’ affect firms’ choices of multidimensional product quality. I show that after the introduction of NHQI: (1) scores of quality measures improve for the reported dimensions but deteriorate for the unreported ones; (2) there is no evidence that nursing homes decrease quality‐related inputs; (3) consumer demand becomes sensitive to changes in the NHQI quality measures. These findings are consistent with the multitasking hypothesis that firms may respond to information disclosure by reallocating effort across dimensions of quality without necessarily increasing overall quality.
Author: Susan Feng Lu
Institution: University of Rochester
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3124426841