Table 2.

Estimation of the Choice Function Used to Calculate the Instrumental Variable

Variable	Coefficient	z‐statistic	Marginal Effects
Distance from hospital to SNF	−0.123***	−296.00	−0.111
Distance from zip code to SNF	−0.127***	−303.55	−0.117
No. of empty beds before admission date	0.011***	36.26	0.007
SNF's historical risk‐adjusted rehospitalization rate	−0.020***	−25.93	−0.007
Capacity of SNF	0.001***	23.04	0.007

The choice function is estimated using 123,572 patients (random 10 percent sample) newly admitted to SNF in 2013. Capacity of SNF is defined as the highest number of patients the SNF had on a given day between 2009 and 2013. The median number of SNFs in patient's choice set was 90 (mean 111.8). Pseudo R‐squared of this regression was 0.3446. The marginal effects show change in likelihood of admission to the chosen SNF if the relevant characteristics of the chosen SNF changes by one standard deviation (see Table 1 for standard deviation).

***p < .01.