• The editor in charge of this paper was Steffano DellaVigna.

  • Acknowledgments: We acknowledge the support of the Ramón Areces Foundation (III Concurso Nacional), grants SEJ2004-00670, SEJ2007-66268, ECO2010-20504 (Matilde P. Machado), ECO2009-11165 (Ricardo Mora), SEJ2008-027038/ECON, ECO2011-25330 (Antonio Romero-Medina), from the Spanish Ministry of Education and Science. We thank Pedro Albarrán, James Banks, Lola Collado, Michael Creel, Zvi Eckstein, Roger Feldman, Rachel Griffith, Maia Güell, and Marcos Vera, two editors, and four anonymous referees for valuable comments. We also thank the Ministerio de Sanidad y Consumo, in particular Elvira González for providing us with the main data, Josep Vaqué and the Sociedad Española de Medicina Preventiva, Salud Pública e Higiene, Diario Médico for allowing us access to its archives, and Adelheid Holl for providing us with additional data. We are also thankful to Mercedes Cabañas, Oscar Alberto Véliz, and Laura Muñoz who helped us with the data collection. This article was supported by an unrestricted educational grant awarded jointly to the Universities Carlos III de Madrid and Pompeu Fabra de Barcelona by The Merck Foundation, the philanthropic arm of Merck Co. Inc., White House Station, NJ, USA.

  • E-mail: (Machado); (Mora); (Romero-Medina)


This paper uses a novel approach to infer hospital technical quality from revealed preferences over residency programs. Specifically, we use Spanish medical graduates’ residency choices made from 1995 to 2000. We start by estimating a model of medical graduates preferences that controls for hospital, proximity, specialty, and gender effects. We interpret the coefficients on the hospital dummy variables as measures of medical graduates’ preferences over hospitals. Our results show that graduates do indeed discriminate between hospitals and that their preferences correlate with hospital-specific covariates arguably related to hospital training quality. We then show that preferences from medical graduates are positively and statistically significantly correlated with risk-adjusted hospital rankings based on five alternative outcome measures. Finally, we construct reputation scores for each hospital using news story counts in three media outlets and find that medical graduates’ preferences are especially valuable for inference of hospital technical quality of care as they do not simply reflect well known reputation.