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Hirth, Chernew, and Orzol 2000;

Weisbrod and Schlesinger 1986). However, little is known empirically about the degree of influence organizational ownership has on consumers'

choice of sellers, and the sparse empirical studies present an incomplete picture. While Ballou (2005) found consumers preferred nonprofit over for-profit nursing homes in Wisconsin, Noguchi and Shimizutani (2005) found no evidence consumers'

preference for nonprofit over for-profit at-home care providers in Japan. These differences could be cultural or industry related, so additional research is needed in this area. ? ?

4 Malani and David (2008) argued that nonprofit status does not seem to be used as a signal of quality because most of the nonprofit child care centers, nursing homes and hospitals in their study did not advertize their nonprofit status in their marketing materials or website. In contrast, Schlesinger et al. (2004a) and Handy et al. (2010) found that the majority of consumers believed that nonprofit organizations were of higher quality and more trustworthy than their for-profit counterparts, and Holtmann and Ulmann'

s (1993) found that individuals who were more vulnerable to exploitation (i.e., those without a spouse, those expecting a long stay) chose nonprofit over for-profit nursing homes. These findings suggest that nonprofit, or by a similar argument government, status may be used by consumers in the selection of sellers by at least some consumers. However, other research has suggested consumers are unaware of the ownership status of their service providers. For example, Mauser (1993, 1998) found that three-quarters of parents could not identify correctly the ownership of the day care center to which they send their children, and only 14% of parents cited organizational form as important in selection. Those who did use organizational form in selection were more likely to choose nonprofit organizations, and those who reported awareness of the problem of asymmetric information were more likely to choose religious nonprofits. It is unclear in Mauser'

s research whether consumers consider nonprofit status or religious affiliation, which is positively correlated with nonprofit status, as the factor protecting them from asymmetric information problems. In summary, it is still not clear whether consumers use ownership as a selection criterion, whether they use religious ownership (rather than nonprofit status) as a selection criterion, or whether those who search more extensively end up in nonprofit organizations because of the other quality signals they discover during search. It is also possible that ownership is a noisy ? ?

5 signal of quality, and therefore not often used. In our paper, we are interested in whether and to what extent consumers respond to organizational ownership as a signal of service quality in the process of choosing their service provider. Specifically, we investigate the impact of ownership on consumer search, and test our hypotheses with data from the nursing home industry in Minnesota, where nonprofit, for-profit and local government homes have been competing against each other for customers for years in an environment with strict price controls. The strict regulatory environment means that consumers are better off searching for quality. A plethora of studies, many of them in the nursing home industry, have shown that the service quality in for- profit firms is often lower than in local government and nonprofit organizations (Amirkhanyan, Kim, and Lambright 2008;

Ballou 2005;

Ben-Ner, Karaca-Mandic, and Ren 2012;