And, just as folks used to work backwards from the desired policy intervention to the market failure theory that could justify it, they can now work backwards from the desired outcome to the behavioural economics rationale. So if you don't like people getting compensation for organ donation or blood donation, just say that it'll interfere with altruistic donation and cite some experimental evidence on warm glow.
Mario Macis finds that, contrary to the behavioural blackboard, real world field experiments giving people real money for blood donations increases donations.
As an economist, I wondered: Can we use economic incentives to stimulate blood donations? Economic intuition would suggest that the answer is yes, but theories in psychology and behavioral economics indicate that incentives might actually backfire if they conflict with people's intrinsic motivations to perform altruistic acts.Here's the paper (ungated). Some of the effect is due to displacement - some donors move to areas providing the incentives. But the result holds: supply curves slope upwards.
Together with Nicola Lacetera and Robert Slonim - my two research colleagues - I wanted to find a more definitive answer. We conducted a randomized controlled trial involving nearly 100,000 individuals, in partnership with the American Red Cross in Northern Ohio, to study the effect of economic incentives on blood donations.
In our study, we found that an advertised offer of a $5 gift card increased the likelihood of giving blood by 26 percent. A $10 gift card produced a 52 percent rise. And a $15 card caused an uptick of 72 percent. The offer of gift cards even caused people to motivate others to donate, including people who previously had never given blood. The incentives also induced people to switch the locations and dates of their usual blood donations to sites where the rewards would be available. Also, there was no effect on the share of individuals who presented at the drives but were ineligible to donate for medical or other reasons.
We concluded that economic incentives significantly increase donations from the public and can be used to increase donations in areas and at times of the year when blood supplies are particularly low.
Moving to donor payment for blood might still not pass cost-benefit analysis: because you also have to pay for inframarginal units, the cost of the whole scheme in terms of new units donated wound up being $42 per unit. They reckon this easily passes cost-benefit given some estimates of the value of blood product collected.
Alas, under public health systems, the fiscal costs would fall on the government while the benefits would accrue to folks then able to get needed transfusions.
Update: Lynne Kiesling agrees on behavioural econ...