In developed countries, the role of public authorities as financing bodies and regulators of the long-term care sector is pervasive and calls for well-planned and informed policy actions. Poor quality in nursing homes has been a recurrent concern at least since the 1980s and has triggered a heated policy and scholarly debate. The economic literature on nursing home quality has thoroughly investigated the impact of regulatory interventions and of market characteristics on an array of input-, process-, and outcome-based quality measures. Most existing studies refer to the U.S. context, even though important insights can be drawn also from the smaller set of works that covers European countries. The major contribution of health economics to the empirical analysis of the nursing home industry is represented by the introduction of important methodological advances applying rigorous policy evaluation techniques with the purpose of properly identifying the causal effects of interest. In addition, the increased availability of rich datasets covering either process or outcome measures has allowed to investigate changes in nursing home quality properly accounting for its multidimensional features. The use of up-to-date econometric methods that, in most cases, exploit policy shocks and longitudinal data has given researchers the possibility to achieve a causal identification and an accurate quantification of the impact of a wide range of policy initiatives, including the introduction of nurse staffing thresholds, price regulation, and public reporting of quality indicators. This has helped to counteract part of the contradictory evidence highlighted by the strand of works based on more descriptive evidence. Possible lines for future research can be identified in further exploration of the consequences of policy interventions in terms of equity and accessibility to nursing home care.