Volume 13, (Supplement) 1978
Green, Jerry. 1978. "Physician-Induced Demand for Medical Care." Journal of Human Resources 13(S):21-34.
This paper addresses the theoretical models designed to ascertain the existence of a variable level of physicians' activity in shifting the demand of their patients. Two basic approaches are followed: equilibrium models of the demand for health care, and disequilibrium models. Within the former category, both competitive and monopolistic behavior are studied. Using the monopolistic model, a statistical test of the hypothesis of "no induced demand" is constructed, and fails to reject it. The disequilibrium analysis of other writers is analyzed and alternative specifications of such a model are set out.
The author is Professor of Economics, Harvard University. The author is indebted to Victor Fuchs, Joseph Newhouse, and Charles Phelps for helpful comments, to Louis Garrison for research assistance, and to Bronwyn Hall for overcoming computational problems.
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