Major unexplained variations in surgical rates have been documented across geographic areas over at least the last four decades. This paper attempts to assess the contribution that population characteristics make to these variations. Variations in surgical rates among the elderly across 56 small rural areas are compared with variations in characteristics of the elderly population of these areas including self-reported health status, levels of disability, mental status, socioeconomic status, ethnic characteristics, etc. The data do not support a needs model for explaining variations in surgical rates. High rate areas were not characterized by an elderly population that was disabled and in ill health. High rate areas did contain a more educated elderly populations, as well as more elderly whose national origins were Canadian, British or American.