We examine sources of regional variation in pharmaceutical prescriptions.

In Germany, there are large regional differences in the prescriptions of antibiotics, opioids, and antidepressants. These differences could stem from either different patient populations or differences in practice style and physicians’ prescription behaviour between regions.

In order to distinguish between the two causes, we follow individuals who move from one region to another. The identifying assumption is that individuals’ medical needs with respect to pharmaceuticals remain unchanged before and after moving to another region, but the prescribing physicians change.