Predictably Unpredictable Inspections

Inspections are a common tool for acquiring information and incentivizing compli-ance. Though typically unannounced, they often follow a predictable schedule. We study how this predictability shapes firm effort and patient outcomes in U.S. nursing homes. Nursing homes “slack” in the low-risk period following an inspection and ramp up e!ort as their next inspection approaches. Patient survival mirrors this pattern, suggesting meaningful consequences for care quality. We embed these estimates in a dynamic model capturing how inspection regimes incentivize e!ort and reveal quality. Unpredictability induces as much additional effort as increasing inspection frequency by 10%, with minimal loss of informational value.