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Informational Frictions and Practice Variation: Evidence from Physicians in Training
Working Paper

Published By

Stanford University

2016

Abstract: Substantial practice variation across physicians for seemingly similar patients is an unresolved puzzle of great interest to economists and policy makers. This paper studies physicians in training to explore the behavioral foundations of practice variation. A discontinuity in the formation of teams reveals a large role for relative experience in the size of practice variation. Among the same physician trainees, convergence occurs in services driven by specialists, where there is arguably more explicit knowledge, but not on the general medicine service. Similarly, rich physician characteristics correlated with preferences and ability explain little if any variation.

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