Physician Financial Incentives and Cesarean Delivery : New Conclusions from Used Data

This paper replicates Gruber, Kim, and Mayzlin's (1999) analysis of the effect of physician financial incentives on cesarean delivery rates, using their data, sample selection criteria, and specification. It cannot replicate the results: there are substantial differences in the sample size, the values of some key independent variables, and the estimated effects. Furthermore, coincident trends help explain their estimated positive relation between fees and cesarean utilization. These data ultimately indicate that a $1000 increase, in current dollars, in the reimbursement for a cesarean section increases cesarean delivery rates by about one percentage point, one-quarter of the effect estimated originally