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Comparative analysis of the determinants of fees charged by fee-based homes for the elderly in urban and suburban areas

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Abstract

This study contributes to establishing the payment function of fee-based homes for the elderly. Disclosure statements from such homes for the elderly in selected urban and suburban cities in Fukuoka Prefecture, Japan—considered a typical prefecture with adjoining urban and suburban areas—were examined. The study compared the determinants of the amounts charged by the homes based on the distinct geographic features of urban and suburban areas. The hedonic price model was combined with a two-stage least squares regression to determine the determinants of lump-sum and monthly payments. We found that the factors that influence monthly payments in urban areas include distance to a park, distance to the coast, meals offered, number of care staff, and initial lump-sum payment. In contrast, factors such as room size, distance to a bus stop, distance to a park, and the number of night staff influence monthly payments in suburban areas. We conclude that the surrounding landscape has a greater influence on monthly payments in urban areas than in suburban areas. Moreover, in suburban areas, the number of night staff has a substantial impact on monthly payments. The results can help provide investment suggestions in certain cases depending on the amount of investment capital.

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Notes

  1. The Japanese government issues different amounts of funds to elderly facilities according to residents’ eligibility, while residents also pay a long-term care insurance fee to the nursing home based on his or her eligibility. This fund/fee is the same amount for both public and private nursing homes. Public and private nursing homes differ in that in public nursing homes, the fund is the main profit resource. In private nursing homes, the fund is a profit resource, although not the main resource. Some private nursing homes provide wider rooms, a better environment, and many more staff, which are reflected in their price (lump-sum and monthly payments). Furthermore, the managers of private nursing homes can freely set the price (lump-sum and monthly payments). In addition, the lump-sum and monthly payments are the basic profit resource, and lump-sum payments are the main profit resource for private nursing homes. Hence, we consider it meaningless to analyze this fund, and in this study, thus subtract the LTCI fee from the monthly payment.

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Authors and Affiliations

  1. Laboratory of Environmental Economics, Department of Agriculture and Resource Economics, Graduate School of Bioresource and Bioenvironmental Sciences, Kyushu University, Fukuoka, 819-0395, Japan

    Zhen Wu

  2. Laboratory of Environmental Economics, Department of Agricultural and Resource Economics, Faculty of Agriculture, Kyushu University, Fukuoka, 819-0395, Japan

    Yoshifumi Takahashi, Goshi Sato & Mitsuyasu Yabe

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  1. Zhen Wu
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Wu, Z., Takahashi, Y., Sato, G. et al. Comparative analysis of the determinants of fees charged by fee-based homes for the elderly in urban and suburban areas. J Hous and the Built Environ 37, 291–309 (2022). https://doi.org/10.1007/s10901-021-09837-w

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