SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

Abstract: The average cesarean section rate in Sweden more than doubled during the 1970s, and amounted to 12-3 percent in 1983. After that, there was a steady-state for a couple of years and towards the end of the 80s even a small decrease, to 10.9 percent in 1990. In the early 90s, there was a slight tendency towards an increase. Continuously, however, there has been a considerable variation in cesarean section rates among obstetrical departments. The objective of the study was to explain the interdepartmental variation, and to discuss its potential economic consequences. Using data fron The Swedish Medical Birth Registry 1991, we made a cross-sectional study of the cesarean section rate at the departmental level. We identified some 20 determinants, demand- related as well as supply-related, including practice style. A general model including all regressors was specified. After reducing this model, we were able to explain about one third of the variation. We conclude that the large variation in cesarean section rates implies inefficiency, mainly due to overutilization, but perhaps also underutilization. It is difficult to calculate the resulting welfare loss to society, but we made some rough estimations, indicating an additional cost for "unnecessary" cesarean sections of 12-14 million SEK per year.

Keywords: Cesarean section; practice variation; economic consequences; regression analysis

JEL-codes: I10; I12

27 pages, March 1996

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