Physician licensure: a new approach to examining the role of professional interests.

For years, economists have debated the extent to which organized medicine has benefited from medical licensing restrictions. This debate has been hampered by the lack of a viable alternative hypothesis. This paper provides an alternative hypothesis and suggests an empirical test which focuses on the relationship between licensure restrictions and the level of consumption of physician services across states. The evidence suggests that in the mid-1960s the interests of organized medicine dominated those of consumers in influencing the medical regulatory supply process.