Abstract
ABSTRACTDespite the important role played by cost considerations in policy decisions regarding services for the elderly there has been relatively little reliable research on this topic. A large nationally representative survey of old people's homes conducted by the Personal Social Services Research Unit in England and Wales in 1981 provides a firm foundation for the careful examination of the cost of residential care. Focusing on residential homes in the public sector, the cost function analyses reported in this paper have a number of policy implications. The empirical results help to explain cost inflation and allow the prediction of future cost trends, they inform ‘balance of care’ discussions and inter-authority and inter-sectoral comparisons, and they provide evidence on the cost implications of scale, group-living design, day care and sheltered housing. Finally, the relationship between cost and social environment (a central component in any quality of care assessment) is examined. The results suggest that there is no significant association between the two.
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