The demand for residents.

This paper develops an empirical model of the demand for medical residents. Not-for-profit teaching hospitals are viewed as firms facing shadow prices that differ from market prices, and the impacts of variations in stipends in the quality of training, in the cost of teaching, and in hospitals' objectives on the shadow cost of hiring residents are made explicit. Empirical results from three data sets are shown to be consistent with a simple derived demand model, and the indirect effects of increased competition and cost control initiatives on the demand for residents are assessed.