Informal and formal care for the elderly: decision determinants and their implications

In this article, a model is developed of the determinants of elderly health care choice between the options of informal care (i.e., provided by family and friends) and formal care (i.e., care provided via the market). These determinants are: Expertise Capacity, Resource Capacity, Time Capacity, Economic Rewards, Psychic Rewards, Trust, and Control. This model is based on the theoretical work of Lusch, Brown, and Brunswick (1992) in the marketing literature and a variety of empirical findings in health care literature. The Lusch et al. (1992) framework models the general determinants of an entity's choice between fulfilling needs on their own (i.e., internal exchange or self-production) or going to the market to fulfill their needs (i.e., external exchange). The goal of this article is to develop understanding of formal care and informal care use decisions, and to create managerial recommendations based on a sound theoretical understanding of the issues.