Economics

Cesarean section rates vary widely across U.S. counties, yet it remains unclear how much of this variation reflects demand-side factors (such as patient risk or preferences) versus supply-side factors (such as physician practices or hospital incentives). We develop a new empirical strategy to isolate the influence of supply-side forces. Exploiting hospital obstetric unit closures from 1989–2019 that reallocate some mothers to counties with different C-section rates, we find that a one–percentage-point increase in the delivery county’s rate raises a mother’s likelihood of a C-section by roughly one point. The results point to a dominant role for provider behavior and local practice no..