The health economics literature contains contradictory empirical findings regarding the cost of an empty hospital bed. Recent empirical studies which account for the endogeneity of reserve capacity produce high estimates of these costs, while earlier studies and industry experts maintain that...

Recent models of firm failure and growth have ignored demand factors. In this paper, we generalize these theoretical analyses to include demand factors in explaining failure and growth for heterogeneous firms in local markets facing imperfect but increasing competition. The model is then applied...

The hospital competition literature shows that estimates of the effect of local market structure (concentration) on pricing (competition) are sensitive to geographic market definition. Our spatial lag model approach effects smoothing of the explanatory variables across the discrete market...