Results for “organ donation”
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The story of GiveDirectly

Paul Niehaus, Michael Faye, Rohit Wanchoo, and Jeremy Shapiro came up with a radically simple plan shaped by their own academic research. They would give poor families in rural Kenya $1,000 over the course of 10 months, and let them do whatever they wanted with the money. They hoped the recipients would spend it on nutrition, health care, and education. But, theoretically, they could use it to purchase alcohol or drugs. The families would decide on their own.

…Three years later, the four economists expanded their private effort into GiveDirectly, a charity that accepts online donations from the public, as well. Ninety-two cents of every dollar donated to GiveDirectly is transferred to poor households through M-PESA, a cell phone banking service with 11,000 agents working in Kenya. GiveDirectly chooses recipients by targeting homes made of mud or thatch, as opposed to more durable materials, such as cement or iron. The typical family participating in the program lives on just 65 nominal cents-per-person-per-day. Four in ten have had a child go at least a full day without food in the last month.

Initial reports from the field are positive. According to Niehaus, GiveDirectly recipients are spending their payments mostly on food and home improvements that can vastly improve quality of life, such as installing a weatherproof tin roof. Some families have invested in profit-bearing businesses, such as chicken-rearing, agriculture, or the vending of clothes, shoes, or charcoal.

More information on GiveDirectly’s impact will be available next year, when an NIH-funded evaluation of the organization’s work is complete. Yet already, GiveDirectly is receiving rave reviews.

Here is a good deal more.  Here is one of my earlier posts on zero overhead giving.  Here is Alex’s earlier post.  Just last week I met up with one of the recipients of one of my 2007 donations and I am pleased to report he is doing extremely well as an actor and filmmaker.

Here is the site for GiveDirectly.  Here is one very positive review of the site, from GiveWell.

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.

There is no serious evidence that GMOs are harmful

If the California initiative passes, “we will be on our way to getting GE-tainted foods out of our nation’s food supply for good,” Ronnie Cummins, director of the Organic Consumers Association, wrote in an letter in March seeking donations for the California ballot initiative. “If a company like Kellogg’s has to print a label stating that their famous Corn Flakes have been genetically engineered, it will be the kiss of death for their iconic brand in California — the eighth-largest economy in the world — and everywhere else.”

Here is much more.  Why not require labels warning customers of all sorts of phantom harms?  “Warning: this product contains dihydrogen monoxide!”

Bone Marrow Bounty Hunters

Amit Gupta has leukemia and needs to find a  bone-marrow transplant. Gupta is the founder of the do-it-yourself photography site Photojojo and the collaborative-working community Jelly and many of his high-tech friends have jumped to his aid including Seth Godin. Here’s Virginia Postrel:

[Godin offered] to pay $10,000 to anyone who became a match for Gupta and made the stem-cell donation, or to give the money to that person’s favorite charity. The offer, he says, was “a chance to say to my readers, ‘Hey, I care about this. A lot. Money where my mouth is.’”

He picked $10,000 because, he says, it’s “enough money to matter to both the giver and the recipient, without being enough money to sue over, cheat over or corrupt.”

Gupta’s friend Michael Galpert, one of the co-founders of the photo-editing site Aviary.com, quickly matched Godin’s offer. “I would do anything that could contribute to helping save his life,” he says.

With $20,000 at stake, the cause did indeed take on new urgency….There was only one problem. The offer was illegal.

Paying a marrow donor is currently illegal under the same law that makes paying organ donors illegal, despite the fact that marrow donation (technically blood stem cells from marrow) is much more like blood donation or egg donation than donating a kidney. (To avoid the law Godin has modified his offer.) Fortunately, the law might be overturned.

In February, the 9th U.S. Circuit Court of Appeals heard arguments in a lawsuit challenging the constitutionality of the ban on valuable consideration for bone-marrow donations. The suit was brought by the Institute for Justice, a libertarian public-interest law firm, on behalf of plaintiffs who include patients, parents of sick children, a doctor who does bone- marrow transplants and a charity that would like to offer incentives, such as scholarships, to encourage more donations.

The lawsuit argues that since marrow cell transplants aren’t significantly different from blood transfusions, the federal government has no “rational basis” for outlawing the kind of compensation that is perfectly legal not only for blood but also for other regenerating tissues, such as hair and sperm, not to mention eggs, which don’t regenerate. This disparate treatment of essentially similar processes, it maintains, violates the Constitution’s guarantee of equal protection. A decision could come down any day.

The economics of Al Qaeda?

Such analyses are often highly speculative, but this one seems to be based on concrete data:

And, contrary to speculation that Al Qaeda in Iraq was reliant on international donations, this wasn’t a source of funding either. The group was self-financing. In fact, the core organization of Al Qaeda in Iraq in Anbar province was so profitable that it sent revenue to associates in other provinces of Iraq, and perhaps even further afield. The group raised millions of dollars annually through activities such as simple theft and resale of valuable items such as cars, generators, and electrical cable, and hijacking truckloads of goods, such as clothing. And their internal financial record-keeping was diligent, with all the requirements of expense accounts in regular businesses. A central unit of Al Qaeda in Iraq’s hierarchy required operatives to keep records of even the smallest outlay and to turn over their “take” to upper-level leaders, who made the spending decisions.

The Matchmaker

The Boston Globe’s Leon Neyfakh has a good piece on Alvin Roth:

Roth has always been interested in the idea that sophisticated theories can be used to solve practical problems. As a graduate student at Stanford University, he earned a doctorate in operations research, which uses math to help organizations run more smoothly. Roth was just 19 when he started at Stanford, having quit high school without graduating at the age of 16 and finished Columbia University in three years. At just 22, he got a job as an assistant professor at the University of Illinois, and in 1977, at just 25, he was granted tenure there….

In the years since, Roth has emerged as a rare figure in the academic world: a theorist willing to dive into real-world problems and fix them. After helping the med students, he designed a better way to assign children to public schools — the system now used by both Boston and New York. He also helped invent a system for matching kidney donors with patients, dramatically increasing the number of donations that take place each year. More recently, he and one of his students have been talking with Teach for America about improving the system it uses to deploy volunteers around the country.

… Inspired by Roth’s work, these rising economists are also setting their sights on real-world problems. Some are looking at dating websites; others are interested in how universities could do better at scheduling their students’ classes. Like Roth, all of them envision a world in which economists, as unlikely as it may seem, are recognized as society’s mechanics.

One minor note, kidney exchanges are great but I wouldn’t describe the increases as “dramatic.” We will need, in addition, other ideas to alleviate the shortage of transplant organs.

Givewell on Giving to Japan

I agree with this advice from Givewell the most analytically tough of the charity ratings agencies.

* Those affected have requested very little, limited aid. Aid being offered far exceeds aid being requested.
* Charities are aggressively soliciting donations, often in ways we feel are misleading.
* Any donation you make will probably be used (a) by the charity you give it to, for activities in a different country; (b) for non-disaster-relief-and-recovery efforts in Japan.
* If you’re looking to pursue (a) and help people in need all over the world, we recommend giving to the best charity you can, rather than basing your giving on who is appealing to you most aggressively with images and language regarding Japan.
* If you prefer (b), a gift to the Japanese Red Cross seems reasonable.

Overall, though, a gift to Doctors Without Borders seems to us like the best way to effectively “respond to this disaster”. We feel they are a leader in transparency, honesty and integrity in relief organizations, and the fact that they’re not soliciting funds for Japan is a testament to this. Rewarding Doctors Without Borders is a move toward improving incentives and improving disaster relief in general.

Donate to Doctors Without Borders.

Civil Society and the Iceberg Economy

I enjoyed this piece by Rebecca Solnit on what she calls the iceberg economy and the power of voluntarism:

Who wouldn’t agree that our society is capitalistic, based on competition and selfishness? As it happens, however, huge areas of our lives are also based on gift economies, barter, mutual aid, and giving without hope of return (principles that have little or nothing to do with competition, selfishness, or scarcity economics). Think of the relations between friends, between family members, the activities of volunteers or those who have chosen their vocation on principle rather than for profit.

…The shadow system provides soup kitchens, food pantries, and giveaways, takes in the unemployed, evicted, and foreclosed upon, defends the indigent, tutors the poorly schooled, comforts the neglected, provides loans, gifts, donations, and a thousand other forms of practical solidarity, as well as emotional support.

With much of this I wholeheartedly agree. But Solnit's piece is marred by an analytical framework that places cooperative charitable activities poles apart and in opposition to unprincipled, selfish capitalism. Charity and trade, however, are both species of voluntarism more closely aligned with one another than with the coercive apparatus of the state. Indeed, it is through markets that human beings achieve the most extensive cooperation. True, capitalist cooperation is not as deep as that of say the family but precisely because it is not as deep it is far wider in scope, encompassing the world. To propose the deep ties of the family as an alternative to capitalist cooperation is to understand neither and when implemented to be inimical to both.

In the introduction to The Voluntary City (note the title) Peter Gordon, David Beito and myself argued for a more inclusive framework.

The authors of this volume manifestly include non-profits in the market sector. The inclusion is important because by focusing on for-profit firms proponents of markets may have overstated the case for markets narrowly conceived. Yet by ignoring the role of non-profits, opponents of markets may have understated the case for markets broadly conceived. Alternatively put, what conventional economics refers to as market failure may actually be a limited set of problems associated with for-profit firms and markets. If the term "market" is broadened to include non-profit firms and other voluntary but not for-profit organizations, the scope of such failure may be diminished. Thus, rather than saying that the authors of this volume argue for a larger role for markets, it is more revealing to say that they argue for a larger role for civil society.

One virtue of the term civil society is that it is not wrapped up in the same baggage as the term markets; in particular, to favor civil society is not necessarily to regard self-interest as the sole or even most important motivator of human action. Unfortunately, the market/government debate has often proceeded as if it were a debate between self-interest and other-regardingness. Yet there is growing support for the view that our ancestors learned to forge connections and developed a social nature for the practical reason that such connections enhanced survival, just as did their capacity for self-interest (Ridley 1996; Wright 2000). Humans are neither purely self-interested nor purely other-regarding; humans are individuals who join groups and they possess all the skills appropriate to such a classification. It should come as no surprise then that other-regardingness is not absent from markets and self-interest is not absent from government.

Hat tip to my friends at The Browser.

Addendum: Andrew Gelman comments.

All the Devils are Here

Lots of excellent material in McLean and Nocera's All the Devils are Here.  In addition to devils there are also a few skeletons: in 1990, for example, Fannie paid Paul Volcker to defend and endorse its low capital standards.

A highlight is the chapter on the GSEs and how tightly they wound themselves into the political process. 

Everything the GSEs did was behind the scenes.  But for Congress, it was the homeowners who mattered, since they were the constituents….Johnson solved this problem by establishing what Fannie Mae called partnership offices.  Officially, these were operations dedicated to finding opportunities to purchase mortgages…unofficially, they were the grassroots of a highly sophisticated political operation.  Fannie's first partnership office was in San Antonio, which just happened to be home to Representative Henry Gonzales, then the chairman of the House banking committee…

There was a certain formula to these offices.  They were staffed by someone close to power–the son of a senator, a governor's assistant, a former congressional staffer.  They held ribbon-cutting ceremonies, always with a politician present, to announce, for instance, that Fannie was going to put millions into a senior citizen center.  There were as many as two thousand ceremonies a year in partnership offices all over the country….

Fannie Mae also funneled money to politicians….Over the years, the foundation became one of the largest sources of charitable donations in the country.  It made heavy donations to, among others, the nonprofit arms of the Congressional Black Caucus and the Congressional Hispanic Caucus.

Fannie hired key insiders to plum jobs..[long list of names,AT]…"It was like the local Tammany Hall operation–a jobs program for ex-pols!" says one closer observer.

Fannie spent a staggering amount of money lobbying: $170 million in the decade ending 2006…

McLean and Nocera go on to document how this power meant reports alterted, investigations dropped and so forth.

We need more of this kind of historical public choice, history written with an eye to how power is wielded in the political sphere and how law is really made.  (For another example see my paper, The Separation of Commericial and Investment Banking: The Morgans vs. The Rockefellers.)

Addendum: Arnold Kling's review.

“When Politics is Stuck in the Middle”

That's the header of my New York Times column today, here are some excerpts, starting with the health care issue:

The point here is not to belittle or praise the president, but to point out that his hands are tied. The biggest leftward move in American economic policy occurred during the Roosevelt and Truman years, when the Democrats had the upper hand for five consecutive presidential terms. Because of depression and war, people were looking for real change. Competitive forces in politics were relatively weak, and the Democrats had the chance to make their policies stick.

The Supreme Court‘s recent ruling on campaign spending also comes into clearer focus through the median voter theorem. The court ruled that the government may not ban political spending by corporations in candidate elections. Critics fear that the political influence of corporations will grow, but some academic specialists in campaign finance aren’t so sure.

For all the anecdotal evidence, it’s hard to show statistically that money has a large and systematic influence on political outcomes. That is partly because politicians cannot stray too far from public opinion. (In part, it is also because interest groups get their way on many issues by supplying an understaffed Congress with ideas and intellectual resources, not by running ads or making donations.) It is quite possible that the court’s decision won’t affect election results very much.

Here are the concluding two paragraphs:

The median voter theorem doesn’t predict that the legacy of the Obama administration will be a wash. But it does imply that we might find the most important achievements in areas that don’t always linger on the front page. For instance, the president’s ideas on education, which involve accountability and charter schools and pay for performance, may please the American public and thus make their way into policy. And because education transforms the knowledge and interests of the median voter for generations to come, such acceptance could make for a lot of other improvements.

If you’re looking for change to believe in, and change that will last, the odds are best when political competition is pushing the world in your direction.

Jacob Weisberg has a not unrelated column.  And, for another perspective, here are the comments over at Mark Thoma's blog.  A few further points:

1. "How tough Obama is" matters less than is usually portrayed.  That is the fallacy of anthromorphizing the outcome of political battles.  Obsessing over either positive or negative evaluations of key actors probably interferes with one's abilities to understand underlying structural forces.  

2. Even the Supreme Court usually tracks voter sentiment reasonably well.

3. On the health care issue, I don't think the electoral calculations of  the Democrats are over.

More Assorted Links

Austin Frakt reviews Modern Principles: Macroeconomics.  Austin's blog, The Incidental Economist, covers game theory, investment planning and health economics among other topics.

Here is an updated version of my paper Life Savings Incentives: Consequences, Costs and Solutions to the Organ Shortage.  Did you know that it is legal to offer compensation for donating a whole body (e.g. for research purposes) but not legal to compensate an organ donor to save a life?  Crazy.  Alvin Roth links to a survey of transplant surgeons indicating increasing support for legalizing some forms of compensation (Roth also links to a recent radio interview with yours truly.)

House built from Lego, yes really.  

Kidney Donor Chains

Virginia Postrel has an excellent piece in the online Atlantic on the shortage of transplant organs, it includes a very good discussion of both the promise and limitations of kidney swaps and donor chains.  Imagine that Mrs. Smith and Mr. Jones each need a kidney transplant.  Mr. Smith is willing but due to an incompatible blood type unable to donate a kidney to his wife.  Similarly, Mrs Jones is willing but unable to donate a kidney to her husband.  In a kidney swap, Mr. Smith donates to Mr. Jones and Mrs. Jones donates to Mrs. Smith.  Everyone is happy.

Donor chains extend this idea.  We start with an altruistic donor willing to give to anyone – by careful arrangement it's then possible to produce many transplants.  Recently, a single donor led to a chain of ten transplants!

Despite the promise of these techniques they are being underutilized.  Amazingly, the National Kidney Registry, which coordinates swaps and chains, has donors who are waiting to give.  A clear reminder that $500 bills aren't always picked up as quickly as we would like. 

Even the maximal use of swaps and chains won't solve the crisis, however. For that we are going to need better incentives to encourage more donors.

Dutch Treat

THE Dutch health minister, Ab Klink, is considering a recommendation to offer
free health insurance for life to anyone who donates a kidney for transplant.

The award would be quite valuable, worth about $1500 a year or $24,000 in present discounted value (30 yrs, 5% discount rate, no increase in health care costs).  Becker and Elias predict a large increase in organ supply at $15,000 so the Dutch are in the ballpark for a good test.  More here.

Thanks to Dave Undis of LifeSharers for the pointer.

Prediction Markets: Some assorted news

  1. Wrap-up of an interesting conference run by Consensus Point (HT: Midas Oracle;  Disclosure: I’m an occasional advisor to Consensus Point).  Robin Hanson tells me that he is now (back to) bullish on prediction markets – he saw real evidence of real firms implementing prediction markets and taking them seriously.
    UPDATE: Another nice summary available here.
  2. How to bet real money, in a country in which real money markets are illegal? www.bet2give.com allows you to bet your charitable donations against mine.  You win the bet?  My donations go to your charity.  I win the bet?  Your donations go to my preferred charity.  Brilliant.  Incentives, charitable donations, and legal protection – all good things.  A longer description here.  (HT: Emile Servan-Schreiber of NewsFutures)
  3. The ’08 race at InTrade: Latest trading suggest Hillary is a strong favorite to win the Democratic nomination (66% chance).   The Republican primary is a true three horse race.  Most puzzling (to me): How is Obama only a 16% chance?  Some say he is really running for VP, but the markets suggest he is only a 27% chance to win the second spot on the ticket.  My tip: Buy Obama for Prez at 8%.

    [Full disclosure: I’m an occasional advisor to both Consensus Point and NewsFutures]

The virtues of inegalitarian American philanthropy

This fascinating article raises the question of whether charity is worthwhile and how charity — "imposing" the desires of the rich on social priorities and wealth redistribution — fits a theory of social justice.  In particular, why should the charity of the wealthy receive such significant tax breaks or even be seen as morally legitimate?  Henry Farrell adds much more.

I am a fan of the tax break for American philanthropy for several reasons:

1. Organized religion is the biggest beneficiary.  Religious organizations help poor people, help shape a unique and vital American ethos, and encourage people to have more children.  The demographic effects alone probably makes this self-financing. ($40 billion in foregone revenue is one estimate.)

2. The arts receive about five percent of U.S. charitable donations.  I am more than willing to stomach this degree of anti-egalitarianism in the non-profit subsidy, and yes we do get more beauty for it.  Furthermore the alternative of more direct government arts funding would not work out well in the relatively Puritan United States, even if you think it has worked well in Europe.

3. Philanthropy for higher education is a major reason for American strength.  Note that American higher education a) benefits the entire world, and b) is a major reason why we are richer than Western Europe (wasn’t there a recent NBER paper on measuring this effect?)  The tax break is a politically acceptable way to subsidize elite intellectual activities — which benefit virtually everyone — yet without having government control those activities.

4. Allowing and encouraging people to give away their money causes them to work harder.  Demonstration effects spread the power of this subsidy by creating social networks which favor philanthropy.

5. The general proliferation of non-profit institutions makes America a much more innovative and diverse place, intellectually and otherwise.

6. Relying so much on private philanthropy chips away at the dangerous attitude that there are clearly defined social priorities to which everyone must pay the same heed.

But do read the NYT article and Henry’s post for very different perspectives.

I thank a loyal MR reader for the NYT pointer.