Physician-induced demand for medical care.

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.