Incentives for altruism? The case of blood donations

Nicola Lacetera, Mario Macis 04 November 2008

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Blood transfusions are required in such critical situations as massive blood loss due to trauma, blood replacement during surgical interventions, and the treatment of premature babies, as well as to treat several chronic diseases. There is no available substitute for human blood, therefore all blood needed must be supplied by individuals. In recent years, the demand for blood has increased dramatically, due, among other causes, to an aging population and new medical and surgical procedures, such as organ transplants. Even though many individuals are eligible to donate blood and there are numerous awareness campaigns promoting its importance, only a small percentage of eligible individuals (between 5% and 10%) donate blood in the Western world and even fewer do so in developing countries. As a consequence, episodes of blood supply shortage (as defined by the supply of blood being below what is necessary for three days) are the norm rather than the exception.

In the western world, the supply of blood is a gratuitous, voluntary activity. But given these alarming shortages, “pure” altruism is apparently not enough to guarantee a steady supply of blood. Would additional, “material” incentives stimulate more donors to give their blood? Theoretically, the effect of economic incentives to an activity normally performed for “intrinsic” reasons is unclear. In fact, starting with Titmuss (1971), some have argued that economic incentives might crowd-out intrinsic motivation (e.g. by destroying the sense of “gift” or “civic duty”, or by creating doubts about the true motives for which the donations are performed, as in Benabou and Tirole, 2006) and hence lead to a reduction in donations. In large part, it is because of this concern (as well as concerns about the quality of blood obtained trough material payments) that donations are, in most Western countries, purely based on voluntary, unpaid contributions and existing regulations forbid monetary payments to donors. 

Incentives for blood donation in Italy

In a number of research projects, we have set out to explore which strategies lead to increasing blood supply. More generally, our broader goal is to investigate the determinants of human behaviour in contexts where economic incentives, such as pay-for-performance, might not work in the desired direction. Other examples might include workers employed in occupations where “intrinsic motivation” is important (e.g. social workers, health care professionals, firefighters, etc) and whether it is effective to expose them to explicit incentives. Another realm where these issues are increasingly important is environmentally-friendly behaviour (recycling, reducing pollution etc), where conduct is very much shaped by a mix of social norms, market forces and regulation.

Using a longitudinal dataset including the donation histories of all donors of an Italian town as well as demographic and employment information on the donors, we have studied (1) the impact of a legislative provision that guarantees Italian blood donors who are employees a paid day off work, and (2) the impact of an incentive scheme that offers symbolic rewards (“medals”) with social recognition value but no economic value to repeat donors. Our current results show that donors not only do not refuse the day-off incentive, but they respond to it by clustering their donation in those days (such as Fridays) which carry a high return in terms of consecutive days of leisure. This indicates that "material" considerations dominate over the potentially negative social-image effects of responding positively to economic incentives. We also show that the day-off privilege leads donors who are employees to make, on average, one extra donation per year. Finally, we also find evidence of heterogeneous motivations in different donors, since a subset of donors systematically does not take advantage of the material reward. The latter finding is consistent with the theory of Benabou and Tirole (2006) who postulate that the attitudes towards altruistic activities and social image concerns are heterogeneous in the population.

As for the symbolic rewards, they also appear to increase donation frequency, but only when the prizes are awarded publicly and the recipient’s names are published in the local newspaper. We interpret this finding as showing that donors care about the social recognition attached to their voluntary actions. As pointed out by Neckermann and Frey (2007), awards are broadly used in a variety of contexts, but have not been investigated by economists in depth. Our study documents that, at least in the case of blood donation, an important component of these awards is their publicity, so that awardees can boost their social image. This is also in line with the recent results of Ariely, Bracha and Meier (2008).

Different forms of extrinsic rewards, as expressed by extra (paid) leisure and social recognition, seem to be powerful motivators to donate blood, in addition to purely altruistic reasons. One might ask whether other forms of material rewards, possibly more direct and immediate such as cash incentives, would obtain the same results, and how the size of the reward influences behaviour. Mellstrom and Johannesson (2008) find that Swedish female college students are less willing to undertake a health test in order to be able to donate blood afterward if they are offered monetary incentives. The authors interpret their results as consistent with the claims of Titmuss (1971), although no crowding-out was detected among males (three-quarters of blood donors are typically males).

In partial contrast to these results, Goette and Stutzer (2008) conduct a large field experiment in Switzerland and find that offering lottery tickets (with an expected value of about four US dollars) increased turnout at the blood drives. Preliminary results from a survey we have administered to Italian donors (Lacetera and Macis 2008c) indicate that people prefer small in-kind rewards (e.g. a voucher for books or breakfast after a donation) than the equivalent amount in cash. In addition to the type of rewards, additional research effort is needed to understand the responses to different sizes of material rewards. Gneezy and Rustichini (2000), for example, find a non-linearity in the response of pro-social behaviour to material rewards, with small prizes reducing the provision of the altruistic activity, and larger prizes enhancing it. The paid-leave incentive analysed in one of our studies could be seen as a large incentive.

Conclusions

Preferences toward altruism and the importance attached to social-image concerns seem to be heterogeneous. Empirical evidence from recent experiments and field studies, however, suggests that (most) blood donors respond to material incentives and public recognition in the way predicted by standard economic theory. Rewarding donors, insofar that the “appropriate” rewards are offered (in size and type), can therefore increase blood supply thereby reducing the frequent cases of shortage.

References

Ariely, D., Bracha, A. and Meier, S., 2008. Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially. American Economic Review, forthcoming.

Bénabou, R. and Tirole, J., 2006. Incentives and Prosocial Behavior. American Economic Review 96(5): 1652-1678.

Gneezy, U., and Rustichini,A., 2000. Pay Enough or Don't Pay At All. Quarterly Journal of Economics, August, 791-810.

Goette, L. and Stutzer, A., 2008. Blood Donations and Incentives: Evidence from a Field Experiment, IZA Discussion Paper 3580.

Lacetera, N. and Macis, M., 2008a. Motivating Altruism: A Field Study, IZA Discussion Paper 3770.

Lacetera, N. and Macis, M., 2008b. Social Image Concerns and Pro-Social Behavior, IZA Discussion Paper 3771.

Lacetera, N. and Macis, M., 2008b. “Are all (cash equivalent) extrinsic incentives the same?”, working paper.

Mellstrom, C. and Johannesson, M., 2008. Crowding Out in Blood Donation: Was Titmuss Right? Journal of the European Economic Association, 6, 4, 845-63.

Neckermann, S. and Frey, B., 2007. Awards as Incentives. Institute for Empirical Research in Economics Working Paper No. 334

Titmuss, R.M., 1971: The Gift Relationship, London: Allen and Unwin.

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Topics:  Health economics

Tags:  incentives, Blood donations, altruism

Nicola Lacetera

Assistant professor, Rotman School of Management, University of Toronto

Assistant Professor of Business Economics and Public Policy at the University of Michigan, Ross School of Business