Crowding Out in Blood Donation: Was Titmuss Right?

TLDR: The supply of blood donors decreases by almost half when a monetary payment is introduced, and there is also a significant effect of allowing individuals to donate the payment to charity, and this effect fully counteracts the crowding-out effect.

Abstract: In his seminal 1970 book, The Gift Relationship, Richard Titmuss argued that monetary compensation for donating blood might crowd out the supply of blood donors. To test this claim we carried out a field experiment with three different treatments. In the first treatment subjects were given the opportunity to become blood donors without any compensation. In the second treatment subjects received a payment of SEK 50 (about $7) for becoming blood donors, and in the third treatment subjects could choose between a SEK 50 payment and donating SEK 50 to charity. The results differ markedly between men and women. For men the supply of blood donors is not significantly different among the three experimental groups. For women there is a significant crowding-out effect. The supply of blood donors decreases by almost half when a monetary payment is introduced. There is also a significant effect of allowing individuals to donate the payment to charity, and this effect fully counteracts the crowding-out effect. (JEL: C93, D64, I18, Z13)

Figures

Table 1. Descriptive statistics of the sample.

Figure 2. The supply of blood donors among men for different subject affiliations (no bar implies 0% blood donors in that treatment/subject group).

Figure 1. The supply of blood donors among men and women in the three experimental treatments.

Figure 3. The supply of blood donors among women for different subject affiliations.

Table 3. Results of logistic regression analysis on the probability of becoming a blood donor.

Table 2. Experimental results: the supply of blood donors in each treatment.