diagnosis or ordering treatments that the physician knows will have minimal benefit. Research however suggest that the identification of supplier induced demand (SID) in the health sector may not always be accurate. An empirical study examining the effect of surgeon supply in certain areas on the demand for surgical operations found that surgeon supply is completely wage inelastic, concluding that the incentive to surgeons to increase consumer demand is therefore questionable. A further study examining the effectiveness of cross-sectional studies identifying supplier induced demand in the health sector raised the question that if suppliers can influence demand, there must be a limit on their ability to do so. The suggestion is then made that a formal mechanism is required to outline the reasoning and driving forces behind driving the demand curve outwards. Following this identification, it can be said that empirical tests for supplier induced demand may not be practical and accurate with cross-sectional aggregate date used in foundational research. Furthermore, a weakness in these studies can be found in their date of publication, 1978 and 1981 respectively. The development of medical treatments, drugs and therapeutics has advanced greatly in the last decades since these studies were published and consequentially will have likely shifted the nature of supplier induced demand in the health sector. Explanatory theories Target income hypothesis The target income hypothesis suggests that a physician is motivated to maintain a certain level of desired income (the target) and if their actual income falls below this level, they will then modify their behavior to restore their income back up to the target. Behavior modifications may include alterations in the physician's recommendations to patients as to the extent or appropriateness of diagnostic and treatment modalities in order to produce additional income to meet the target. Obstetricians who recommend C-sections as a standard of care for delivering babies may be using their power and authority over pregnant women and their partners as a revenue generator to reach or maintain their target income. Jonathan Gruber and Maria Owings looked at the relationship between physician financial incentives and cesarean section delivery by examining declining fertility rates in the United States. The fee-for-service (FFS) physician incentive structure makes it easier for SID to occur since it rewards the physician for increasing the quantity of services delivered rather than for the actual quality of the services; this could induce the physician to offer a higher