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In Uruguay, as all over the world, the Caesarean section rate has been systematically increasing, and in 2003 it reached 23 per cent of the deliveries in public hospitals and 42 per cent in private hospitals. Considering deliveries registered in 2003 (23.474) by the Perinatal Information System (PIS) in Montevideo (Uruguay), the probability of having a Caesarean section delivery is estimated, controlled by risk factors and the endogeneity of the choice of hospital. At Montevideo private hospitals this procedure has to be paid for whereas public hospitals have fixed budget payment systems. As theory predicts, in the former there is no effect of income over induction, but in private hospitals this effect is positive, and is lower in cases where there is less medical risk. As a result, probability differences may confirm the induced demand hypothesis in Caesarean section deliveries. The empirical work yields evidence to say that there is 20 per cent of probability for a woman having a Caesarean section delivery in a public hospital, while in private hospitals the probability rises to 40 per cent. At the same time, differences between the two types of hospitals get bigger for lower risk women. For example, the probability of having a new Caesarean section delivery for those with a previous one is 64 per cent in public institutions versus 83 per cent in private institutions. However, women considered to have no medical risk have double the probability of a Caesarean section in private hospitals than in public ones (26 per cent versus 11 per cent).