Rewarding Altruism: Blood for Money

by on December 7, 2011 at 7:32 am in Economics, Medicine | Permalink

Do pecuniary incentives increase blood donation or do extrinsic incentives crowd out intrinsic incentives? In Rewarding Altruism (NBER, free) an important and impressive new paper Nicola Lacetera, Mario Macis and Robert Slonim analyze a field experiment involving some 100,000 donors and find that pecuniary incentives significantly increase blood donations. The field experiment covers a wide geographic area and the donors are tracked for a significant period of time after donating so the authors can look for geographic and temporal spillovers. The authors offered potential donors gift cards of $5, $10 and $15.

Subjects who were offered economic rewards to donate blood were more likely to donate, and more so the higher the value of the rewards. They were also more likely to attract others to donate, spatially alter the location of their donations towards the drives offering rewards, and modify their temporal donation schedule leading to a short-term reduction in donations immediately after the reward offer was removed. Although offering economic incentives, combining all of these effects, positively and significantly increased donations, ignoring individuals who took additional actions beyond donating to get others to donate would have led to an under-estimate of the total effect, whereas ignoring the spatial effect would have led to an over-estimate of the total effect.

Some of the increase in supply came from temporal substitution but this is not without value. Incentives are not just about increasing supply but also about increasing supply at the right time, i.e. when blood is most needed so it’s useful to have a lever that can influence when donations are made.

Crowding out did receive some support in an odd context. The authors found that donors who were surprised with a gift card after they had donated were less likely to donate in the future. Thus, the donors did not reciprocate the unexpected gift and may have felt that their altruistic intention was being undermined. Once again we see the overwhelming importance of context when trying to understand incentives. To paraphrase Mises, an incentive is not an objective fact but a subjective interpretation.

The authors did not find any decline in quality ala Titmuss. Indeed, this is to be expected since modern blood donation is not a random shout-out to people on the street but instead relies predominantly on repeat donors with a long donation history.

Gift cards of $5, $10 and $15 are small incentives and the authors suggest that the benefits from the increased supply far exceed the costs. It’s notable that it takes longer to donate blood plasma and as a result the U.S. blood plasma industry (the “OPEC of blood plasma”) has always relied on paid donors.

Here are my powerpoint slides on Incentives to Increase Organ Donation and here is an older post on sperm exports.

1 Andrew' December 7, 2011 at 7:36 am

This can’t possibly work for kidneys. And we don’t want to incentivize drug users. What we really want is dead motorcyclists.

2 doctorpat December 7, 2011 at 9:45 pm

So you’re suggesting gift cards for young,healthy people to get bike licenses? With an added bonus for moving to 500cc or greater?
Could work…

3 franko December 7, 2011 at 8:19 am

blood donations also are thought to have actual positive health effects for donors, since it stimulates new blood cell production, above the normal run-rate – that (and the related psycho-somatic effect) is why i give, LOL

4 Mike Huben December 7, 2011 at 8:37 am

Let’s get that camel’s nose under the tent! Until we can hunt down the poor for their organs, we need to undermine any non-market institutions we can find!

There would probably be a much larger effect if the popularity of vampire stories was exploited, with actors who play vampires endorsing the donation of blood.

5 Andrew' December 7, 2011 at 8:44 am

Mike,

Noone really wants the poor’s shitty, diseased, poor life choice organs. In fact, that’s one of the things people are worried about paying people. We’ll get the poor peoples’ organs.

[End Libertarian Macho Flash Rant]

6 Yancey Ward December 7, 2011 at 10:24 am

Mike Huben- involuntary brain donor.

7 return December 7, 2011 at 10:57 am

Who would want such a thing?

8 Your neighborhood zombie December 7, 2011 at 1:30 pm

Some folks could use an upgrade, such as Palin or Bush.

Some folks could use a snack….

MmmmmMMmmm, Brainsss! Almost as nutritious as donuts….

9 Yancey Ward December 7, 2011 at 6:49 pm

Door stops are never out of fashion.

10 revver December 7, 2011 at 7:46 pm

Must be a pretty small door 😉

11 zrzzz December 7, 2011 at 8:40 am

What’s the value of a pint of blood? $10? If you make $20/hour at your job, the idea of taking time out of your day to do this seems like more of a burden than its worth. This would only make it attractive to the type of donors you don’t want, like hepatitis-infected street vagrants. If you call it a “donation”, you get more clean donors, because they’re doing it for altruism, not money (If heroin addicts were altruistic, they’d keep their filthy blood out of circulation).

12 Rahul December 7, 2011 at 9:33 am

Is it really that scary if a few undesirables show up to donate? With screening questions and the modern testing procedures won’t it be pretty easy to weed out tainted blood. How big is the risk?

13 KLO December 7, 2011 at 10:09 am

How effective are the screening questions if people are donating for money? Won’t people lie more frequently if they have some incentive to do so beyond, say, embarrassment at admitting drug use? Moreover, if no financial incentive is offered, the most high risk people are far less likely to donate, so that even if people generally lie on the screening questions, it would make less difference.

As far as I know, there is not much of a problem with the blood supply. At current levels, the incentives may not be strong enough to encourage large numbers of marginal donors to donate blood. Increase the incentive, however, and you increase the size of the problem.

14 Rahul December 7, 2011 at 10:27 am

Is there any recent proven case of transfusion caused disease transmission? I like to think we depend more on good lab tests for safety than good faith disclosures.

15 Finch December 7, 2011 at 10:46 am

Doctors warn you pretty sternly about it if the transfusion is at all voluntary. When a close relative had transfusions and had a choice about receiving additional blood, I was quoted risk numbers (which I don’t recall) and asked to weigh them against extended bed rest. The risk numbers weren’t insignificant and we chose to decline further intervention. I think hepatitis was the risk, though I might be misremembering.

16 KLO December 7, 2011 at 11:01 am

According to the CDC, the estimates are that 11 HIV positive blood donations pass through screening and make their way into 20 blood products used in patients in amounts that could lead to infection each year. The incidence of actual infections are likely lower. Just how much lower is hard to calculate, as the most recent reported incident in 2010 shows. Two patients received a transfusion from an HIV infected donor. One died two days later and the other contracted HIV. The deceased patient likely would have contracted HIV had he lived. According to articles about the incident, this is the first time since 2002 that a patient has been infected with the HIV virus from blood products.

Clearly, the risk is low. But how much of this is due to the fact that the general lack of financial incentives for blood donation tend to lead to an altruistic donor base that offers high quality blood? It is hard to know. Still, it is inarguable that incentives will increase the risk of low quality blood making its way into the system. The question really is how much of an increase in risk is their and whether the increased risk is an acceptable trade-off.

We see the same analysis in organ donation, where supply is more significantly constrained. Many organs from marginal donors make their way into the system, and, as a result, infections are more common. The calculus is different from blood donation, however, because many patients would die without the transplants. Hepatitis or HIV infections are bad, but if the alternative is death, many patients will take their chances with high risk organs.

17 Urso December 7, 2011 at 10:35 am

The concern about lying is a serious one. Of course, I have my suspicions as to how efficient the questions they ask really are at weeding out high risk blood donors. “Have you ever traded sex for drugs, even once” is a highly relevant question. “Have you ever visited [lengthy list of countries] at any time since 1974,” maybe not.

18 axa December 7, 2011 at 2:17 pm

Another idealist?

A month ago I donated blood for a friend with cancer and I was really surprised with the last screening question. When I was already connected to the machine, a really nice nurse came in with a card (hallmark size), inside there was only one question. I don’t remember the precise words but it was something like this: “Blood donators are scarce, you may feel compelled to donate cause a family member or a friend really needs it. In case you don’t comply with the donation rules (hepatitis, HIV, drug habit, etc) we (the hospital) will discard your blood and nobody will know. So, mind the family, friends (peer pressure) to donate. Mark yes or no according to your desire.”

If donation is moral duty…….donation centers may have ANOTHER problem. It seems you can not rely on good faith after all =)

19 sort_of_knowledgeable December 8, 2011 at 1:48 pm

It also costs money to screen the blood and probably to dispose of the blood so if you increase the amount of unusable blood it isn’t worth while.

20 Cliff December 7, 2011 at 10:12 am

I thought the study showed no change in quality?

21 Andrew' December 7, 2011 at 10:24 am

The study actually addressed this. Don’t make donors think that their blood is only worth $10 by surprising them with a check after they’ve given.

22 Urso December 7, 2011 at 10:45 am

I can see how that could be insulting or, at least, trivializing.

23 Andrew' December 7, 2011 at 11:40 am

Yeah, don’t do this:

“Hey, thanks for the gift of life, here’s your twenty bucks, see you next Tuesday.”

24 question the question December 7, 2011 at 11:01 am

Make them tax write-offs then.

25 Arthur December 7, 2011 at 9:21 am

I find it funny how some people who comment simply ignore the post.

Anyway, don’t you think “blood for money” is a terrible slogan? It makes me think of bloody diamonts, killing, hired guns, war…I would change the money part, and the blood part of the slogan. Cuz blood=death and people talk about life/death in a kinda “sacred mode” and they don’t like to talk about money in that mode. The feel they are tainting life/death with something dirty.

26 doctorpat December 7, 2011 at 9:50 pm

Exactly, this whole paying for blood thing will completely revolt anyone who has a childish, irrational fear of being logical.

Which admittedly is most of the population.

27 Rahul December 7, 2011 at 10:03 am

What are the laws regarding international movement of blood? Wouldn’t $5 be a a hugely stronger incentive in some poorer country. Perhaps the logistical overhead is prohibitive.

28 Dredd December 7, 2011 at 10:08 am

Sounds like pay it forward, a struggle against the current, but worthwhile, so long a the abusers can’t take advantage of good efforts.

29 dearieme December 7, 2011 at 10:12 am

“a wide geographic area”: an unhelpful remark. Japan? Australia? Chile?

30 Alex Tabarrok December 7, 2011 at 11:14 am

No, Northern Ohio, but wide enough so that they can check whether a reward offered at one donation location reduces supply at other reasonably close locations–it does but the net effect is positive.

31 ezra abrams December 7, 2011 at 11:09 am

I think this was addressed, but blood donations rely on repeat donors (my cousin has a 20 gallon pin !!)
(these pins were the old reward system, you got your first nice pin at , I think 2.5 gallons)
since it relies on repeat donors, does the value of the reward card drift, or is it a psychological thing, people donate because they think they are being valued ??
I’ve been donating blood since I was a college student in the 70s
At that time, you walked, wrote down your name, gave a pint, got a drink of OJ, and walked out.
They had a few questions – malaria, cancer, etc, but it was a low key, relaxed affair

As those of you who have donated recently can attest, those days are as dead as air travel when you could run thru the terminal and get onto the plane 2minutes before departure (with the ground crew waving you on, comeon guy, hurry !!)
donating blood has this quasi militaristic air, so fitting with the GWOT

One aspect of this GWOTization of blood donations is that one feels much less valued; in the old days, the nurses joked, it was fun, you felt like you were helping; today, you feel like a suspect on Law n Order, someone the cops beatup on cause they can on TV

32 Andrew' December 7, 2011 at 11:46 am

Yeah, I almost get the feeling they take the blood out the back door and pour it down the drain. The nurses whisper to each other “If we’d only gone to medical school we could do our humiliations much more easily.”

It’s just one of those things where they don’t know you aren’t an asshole, so they treat you as if you are an asshole. Then if you crack a joke to lighten the mood they think “Hey, we identified an asshole! You think you don’t have to take us seriously, sir? We’ll see about that after we make you sit in that chair over there while we quietly whisper to each other about what to do with you.”

33 JWatts December 8, 2011 at 3:38 am

+1

34 Sebastian December 7, 2011 at 1:00 pm

In Germany you get paid 20-30 Euros for a blood donation if you go to one of the donation centers (all university hospitals have one). They psychological trick they use, however, is that this isn’t “payment”:
It’s an “Aufwandsentschädigung” (yay German words!), i.e. a small compensation for the time you spend donating – not payment for the blood you donate, which is worth much more.
They’re still giving you the feeling of doing a good deed by donating your blood, so I don’t think this would deter donors. Also, it’s a two tiered system, where you also have blood drives in location, run by the red cross, where you don’t get any compensation.

35 anonymous... December 7, 2011 at 1:26 pm

The pending Canadian law alluded to in the 2003 “post on sperm exports” was passed in 2004, and as a result it is indeed illegal to pay for sperm or eggs in Canada. And needless to say, the monopsony Canadian Blood Services agency does not pay for donations.

36 question the question December 7, 2011 at 2:01 pm

Maybe the Red Cross can give out the Rick Steves Doors of Italy or whatever box set.

Works for PBS.

37 TGGP December 7, 2011 at 8:32 pm

Kieran Healy wrote a book on donation. He blogs at both OrgTheory and Crooked Timber.

38 Virginia Postrel December 8, 2011 at 6:56 pm

One point in Kiran Healy’s excellent book, which is also relevant to the comment below, is that in the good old days before blood donation started with a long interrogation, a lot of the loyal, repeat donors turned out to be AIDS carriers. The altruistic blood supply actually spread HIV faster than the paid plasma supply (though, in the absence of tests, both did eventually).

39 Virginia Postrel December 8, 2011 at 6:57 pm

Here’s my review of the book: http://www.nytimes.com/2007/01/28/books/review/Postrel.t.html. For reasons of space, I did not cover his discussion of blood banks.

40 Jack December 8, 2011 at 4:45 am

Ever been to a plasma donation center? It’s like a crack house, homeless shelter, and thai brothel all rolled into one. I’m skeptical but will cheggit and see…

41 Jack December 8, 2011 at 5:11 am

I’m less skeptical now. I wouldn’t read too broadly into this though (beyond the specific case of blood donation, that is). There are definitely cases where the mere mention of money crowds out altruistic motivation, but I suspect these are fewer than people think, and the crowding out can be moderated in different ways (giving a blood donor a gift card instead of cash, giving your escort a ‘donation’ instead of a ‘payment’, etc).

42 Virginia Postrel December 8, 2011 at 6:52 pm

The UCLA blood bank (where I received platelets while on chemotherapy) offers campus employees 4 hours of vacation time for donating (not relevant for salaried profs but important for the many hourly employees) and also gives students movie tickets. It doesn’t seem to detract from either anyone’s good will or the quality of the blood.

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