Choice of NHS-funded Hospital Services in England


  • Corresponding author: Walter Beckert, School of Economics, Mathematics and Statistics, Birkbeck College, Malet Street, London WC1E 7HX, UK. Email:

  • We would like to thank Cory Capps, Zack Cooper, Sean Ennis, Rachel Griffith, Julian Legrand, Bruce Lyons, Carol Propper, Peter Smith, Michael Waterson, the Health Inequalities National Support Team, participants at the Royal Economics Society Conference 2011, participants at the Cooperation and Competition Panel’s conference on choice and competition and two anonymous referees for valuable comments and discussions, as well as Alistair Brown and Anupa Sahdev for their enormous help in putting the data together. All errors are ours. The views expressed in this article are those of the authors and not necessarily those of the Cooperation and Competition Panel.


This article examines the choice of hospital for elective hip replacements amongst patients in England, using patient-episode level data from the Hospital Episodes Statistics records. The article is primarily methodological: we estimate a demand model that allows for heterogeneity across observed patient characteristics and demonstrate how to use this model to simulate the effect of mergers between hospitals. Our article contributes to the empirical literature on hospital choice and provides a novel method for simulating mergers between hospitals with regulated prices. Importantly, in an industry that competes on quality, our demand model estimations also identify important quality dimensions of choice.