The eldercare landscape: Evidence from California

Although the literature suggests that nursing home location is instrumental to the efficient functioning of the long-term care industry, there has been little research directly focused on the spatial distribution of nursing homes. We discuss factors that may influence nursing home location choice, emphasizing agglomeration economies around hospitals. We estimate econometric models of location using information on all freestanding, MediCal-licensed long-term care facilities in the state of California. We find that nursing homes are more likely to locate in the same Census tract as a hospital and are more likely to locate in tracts nearer to those containing a hospital.