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

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.