Professor Hagy’s research predominantly focuses on the demand for quality in child care. In her paper with David Blau, “The Demand for Quality in Child Care”, the authors estimate a model of demand for quality-related attributes of care: group size, staff/child ratio, and provider training. The results show that a decrease in the price of care causes an increase in hours of care demanded and a decrease in the demand for quality-related attributes of care. Income effects on demand for quality are small. In another study, Professor Hagy uses a hedonic price theory approach to estimate the demand for child care quality. She derives an implicit price for staff-to-child ratio. Direct purchase-of-service contracts or voucher programs, by subsidizing only those providers that satisfy state regulatory requirements, effectively lower the implicit price of regulated attributes, such as staff-to-child ratio. Results of this study suggest that such tied subsidies have almost no influence on the demand for child care quality.