Specifying technical change: A research on the nature of technical change in Dutch hospital industry

This paper studies the nature of technical change in Dutch hospitals. From the estimation of a cost function on data in the time period 1993-2000 we conclude that technical change is embodied (input biased) and non-scale augmenting. Technical change leads to an increasing use of medical personnel and material supplies at the expense of nursing personnel. Specifying technical change by a technology index allowing for a shock wise introduction of new technologies is to be preferred to the traditional time trends. Efficiency scores however are hardly affected by the choice of specification.

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