There Will Be Blood

Economists often reduce complex motivations to simple functions such as profit maximization. Writing in The Economist, Buttonwood ably criticizes such simplifications. Buttonwood is too quick, however, to conclude that simplification falsifies. For example, Buttonwood argues:

If there is a shortage of blood, making payments to blood donors might seem a brilliant idea. But studies show that most donors are motivated by an idea of civic duty and that a monetary reward might actually undermine their sense of altruism.

As loyal readers of this blog know, however, the empirical evidence is that incentives for blood donation actually work quite well. Mario Macis, Nicola Lacetera, and Bob Slonim, the authors of the most important work on this subject (references below), write to me with the details:

The decision to donate blood involves complex motivations including altruism, civic duty and moral responsibility. As a result, we agree with Buttonwood that in theory incentives could reduce the supply of blood. In fact, this claim is often advanced in the popular press as well as in academic publications, and as a consequence, more and more often it is taken for granted.

But what is the effect of incentives when studied in the real world with real donors and actual blood donations?

We are unaware of a single study of real blood donations that shows that offering an incentive reduces the overall quantity or quality of blood donations. From our two studies, both in the United States covering several hundred thousand people, and studies by Goette and Stutzer (Switzerland) and Lacetera and Macis (Italy), a total of 17 distinct incentive items have been studied for the effects on actual blood donations. Incentives have included both small items and gift cards as well as larger items such as jackets and a paid-day off of work.  In 16 of the 17 items examined, blood donations significantly increased (and there was no effect for the one other item), and in 16 of the 17 items studied no significant increase in deferrals or disqualifications were found.  No study has ever looked at paying cash for actual blood donations, but several of the 17 items in the above studies involve gift cards with clear monetary value.

Although many lab studies and surveys have found differing evidence focusing on other outcomes than actual blood donations (such as stated preferences), the empirical record when looking at actual blood donations is thus far unambiguous: incentives increase donations.

Given the vast and important policy debate regarding addressing shortages for blood, organ and bone marrow in developed as well as less-developed economies, where shortages are especially severe, it is important to not only consider more complex human motivations, but to also provide reliable evidence, and interpret it carefully. The recent ruling by the 9th Circuit Court of Appeals allowing the legal compensation of bone marrow donors further enhances the importance of the debate and the necessity to provide evidence-based insights.

Here is a list of references:

Goette, L., and Stutzer, A., 2011: “Blood Donation and Incentives: Evidence from a Field Experiment,” Working Paper.

Lacetera, N., and Macis, M. 2012. Time for Blood: The Effect of Paid Leave Legislation on Altruistic Behavior. Journal of Law, Economics and Organization, forthcoming.

Lacetera N, Macis M, Slonim R 2012 Will there be Blood? Incentives and Displacement Effects in Pro-Social Behavior. American Economic Journal: Economic Policy 4: 186-223.

Lacetera N, Macis M, Slonim R.: Rewarding Altruism: A natural Field Experiment, NBER working paper.


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