Cost Information and Pricing: Empirical Evidence
成果类型：
Article
署名作者：
Hsu, Sylvia Hsingwen
署名单位：
York University - Canada
刊物名称：
CONTEMPORARY ACCOUNTING RESEARCH
ISSN/ISSBN：
0823-9150
DOI：
10.1111/j.1911-3846.2010.01051.x
发表日期：
2011
页码：
554-+
关键词：
FINANCIAL PERFORMANCE
market-structure
Managed care
COMPETITION
Hospitals
QUALITY
nonprofits
demand
prices
摘要：
Prior research on whether to include allocated capacity cost in pricing is still inconclusive, because economic theory considers this cost to be sunk cost and accounting research suggests that it can proxy for the opportunity cost of capacity usage. This study examines how expected capacity utilization and demand variability affect the association between allocated capacity costs and prices. Empirical analysis of 7,746 service observations from private hospitals in California indicates that high expected capacity utilization increases the association between allocated capacity cost and prices; services with high capacity utilization are more likely to incur delays, and thus opportunity costs such as allocated capacity cost provide information relevant to pricing. Results also show that uncertain demand negatively influences this association. Uncertain demand leads to greater errors in measuring the opportunity costs of capacity usage; hence, hospitals reduce the weight of allocated capacity cost in pricing services with large demand variability. In addition, the impact of capacity utilization and demand variability on the association between allocated capacity costs and prices is significant in regular services and services in competitive markets, but insignificant in intensive care services and services in less competitive markets. Findings suggest that capacity utilization and demand variability affect the use of capacity costs in pricing, thus advancing our understanding of conditions under which firms charge capacity costs in prices; furthermore, hospitals carefully adjust the weight of capacity costs in prices when facing intense price competition.