Estimating hospital production functions through flexible regression models

The subject of discussion is health care production functions. The parametric two‐factor Cobb–Douglas and transcendental logarithmic (translog) production functions are frequently used. However, empirical and theoretical work has often questioned the validity of the parametric Cobb–Douglas and translog as a model for the production of health care. The aim of this study is to propose a new flexible form of production function based on Generalized Additive Models (GAMs) and to compare it with the classical approaches, using data from public hospitals in the Spanish Region of Galicia during the period 2002–2008.