W̅j/W̅m	=	the average gross wage index of the jth hospital in the ith city of the mth labor market area, divided by the average gross wage index across all hospitals in the labor market area.
W̅o	=	a constant.
X̅j/X̅m	=	a vector of the ratios of hospital-specific characteristics (such as the mix of occupations, the proportion of part-time employees) to the average, across the mth labor market area.
Z̅i/Z̅m	=	a vector of the ratios of community-specific characteristics (e.g., the cost of living) to the average, across the mth labor market area.
μ	=	an error term, reflecting unexplained interhospital differences.