In this paper, a probabilistic discrete choice approach is used to examine the influence of economic and non-economic factors on the choice of medical specialty by new physicians. A two level nested logit model is estimated that relaxes the independence from irrelevant alternatives assumption, and allows for a potentially more realistic pattern of substitution across specialty choices. The results from this specification are compared to those obtained from joint and conditional logit models. The findings, which are relatively robust across models, indicate that economic incentives play an important role in the specialty choice process, in particular, expected hours worked and medical school indebtedness. Physician tastes for specialties also appear to have an important influence.