Donald F. Vitaliano

An Empirical Analysis of the Strategic Use of Corporate Social Responsibility

Recent theories of the strategic use of corporate social responsibility (CSR) emphasize the role of information asymmetry and how CSR is likely to be incorporated into a firms product differentiation strategy. A key empirical implication of these theories is that firms selling experience or credence goods are more likely to be socially responsible than firms selling search goods. Using firm-level data, we report evidence that is consistent with this hypothesis.

Cost and efficiency in nursing homes: a stochastic frontier approach

The average level of cost inefficiency in New York nursing homes is estimated at 29%, based on a two-year panel of 164 Skilled Nursing Facilities and 443 combination Skilled and Health Related Facilities. The stochastic frontier cost function is fit to the data utilizing the composed error model, wherein statistical noise and allocative and technical inefficiency are jointly estimated. There is no change in efficiency between 1987 and 1990, and it does not vary between for-profit and not-for-profit homes. Excessive managerial and supervisory personnel and diseconomies of size are linked to inefficient operation. Chronic excess demand is suggested as a cause of the high level of inefficiency.

On the estimation of hospital cost functions

Data from 166 general hospitals in New York State (1981) is used to estimate a quadratic and logarithmic long-run cost function. Both equations fit the data very well but give very different results. The quadratic appears in confirm the commonly-held view of a shallow U-shaped average cost curve, whereas the log function indicates significant economies of scale: a total and average cost elasticity of 0.9 and -0.10, respectively (using beds or patient days to measure output). Ramseys RESET test is used to discriminate between the two models and the quadratic is clearly rejected as a misspecification. Scale economies thus exist even where the usual quadratic suggests otherwise.

X-Inefficiency in the Public Sector: the Case of Libraries:

A short-run total cost function is fitted to 1992 data for 235 public libraries in New York state. The stochastic frontier model is employed, which decomposes the error term into a random variable for statistical noise and a residual component measur ing economic inefficiency. Mean X-inefficiency (cost inefficiency) is estimated to be 24%. Government-run public libraries are about 3% more inefficient than private not-for-profit public libraries. Funding sources also influence efficiency: The greater the proportion of funds derivedfrom local taxation and from gifts, the more efficient the library.

Road accident external effects: an empirical assessment

The relationship between the number of road accidents and the volume of traffic is econometrically estimated in this paper. A stratified random sample of 399 road segments covering urban and rural roads in New York State(USA) in 1985 is analysed. No significant externality is detected. On ver high volume urban roads the marginal to average accident rate ratio is 1.06. On all other roads, a ratio of 0.98 is estimated. These findings contrast sharply with those of Vickrey, who estimated a ratio of 1.5 for California freeways in 1962. The results are, however, consistent with the ‘official view’ of both the US and UK highway authorities that no significant accident externality exists.

Corporate social responsibility and labor turnover

– This paper aims to estimate empirically the effect on the voluntary turnover (quit) rate of employees when a large public corporation already judged as an outstanding employer is also ranked as being socially responsible by an external review organization., – The paper employs a cross‐section regression of the turnover rate of 84 of Fortune magazines “100 Best Employers” against measures of corporate social responsibility (CSR) and several other control variables such as annual wages, ethnic and gender composition of the labor force that economic theory and prior studies have identified as explaining firm labor turnover., – Adoption of business policies that cause the firm to be rated as socially responsible reduce the annual quit rate by 3 percent to 3.5 percent, which amounts to a 25‐30 percent reduction, as compared to non‐CSR public corporations or a larger comparison set including privately held and not‐for‐profit firms., – The wider universe of public corporations may not realize comparable turnover benefits from CSR as these “best employers” because these firms might be especially vulnerable or sensitive to corporate image when hiring workers., – The model estimated permits calculation of the annual rise in average wages that would be required to reduce turnover by the same amount as CSR, a sum of approximately

An economic assessment of the social costs of highway salting and the efficiency of substituting a new deicing material

3,700 per year or about 9 percent of the mean wage, with a lower bound estimate of about

Agricultural districts and farmland prices

1,000. This suggests that these firms can significantly reduce labor costs by investing in worker‐friendly employment policies, which account for half of the entire measured CSR impact., – This is believed to be the first effort to quantify rigorously the effect of CSR on the employment side of firm performance. Prior labor studies have looked at hypothetical employment scenarios involving students.

Information Technology and Corporate Profitability: A Focus on Operating Efficiency

The use of salt for deicing roads results in costs estimated at more than

Do not-for-profit firms maximize profit?

800 per ton-including the costs of repair and maintenance of roads and bridges, vehicle corrosion costs, and loss of aesthetic value through roadside tree damage. Additionally, there are probable health costs related to elevated sodium levels in drinking water. The new Surface Transportation Act of 1991 appears to replace the previous federal funding policy that was biased against the use of calcium magnesium acetate (CMA) with a new subsidy for its purchase that may lead to inefficient overuse.