This article demonstrates that the numerical estimate of an approximately 25 percent risk of nursing home institutionalization reported in the “4–5% fallacy” literature is based on an invalid set of implicit assumptions. Using the most recent national level statistics on nursing home residency and discharge, a measurement technique is introduced to provide an estimate of the maximum and minimum number of nursing home residents in 1976, and a corresponding range for the annualized risk of institutionalization between 6 and 9 percent, within which the true risk must lie.
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