“Loss aversion and altruism in repeated blood donation”
Policy makers have long been concerned about the effects of economic incentives on blood donations. Some would argue that giving explicit incentives to blood donors would lead to the crowding out of intrinsically motivated donors, while increasing the health risks of donated blood. Recent evidence has shown that small economic incentives increase donations, without increasing the proportion of rejected donors (Lacetera et al,Science2013). However, little is known about the effect of the removal of incentives, due to the absence of experiments in which economic incentives were removed.
Aims
The goal of this paper is to use a natural experiment to study the short- and long-run effects of the introduction and posterior removal of a specific monetary incentive for regular blood donors. Between 2004 and 2011, donors who had donated twice within the past 365 days would be waived user charges in using the Portuguese National Health System (NHS). By following donors between 2003 and 2012, I am able to separate their extrinsic valuation from their intrinsic motivation. I measure the extrinsic valuation for the benefit as a combination between health status, geographic location and actual utilization of the emergency departments of the NHS.
Data/Methods
I use a unique panel to analyze pattern of donation of all potential donors enrolled in the Lisbon center of the Portuguese Blood Institute, between January 2003 and December 2012. The panel includes 241,605 donors and 906,139 donations. It includes information regarding health (height, weight, blood pressure, hemoglobin, lab tests), the donation (site, staff, blood drive, waiting times) and socio-demographic variables (age, occupation, town). The main explanatory variable is the utilization of emergency departments, interacted with the different periods defined by the introduction and removal of the incentives. This dataset is quite unique in its ability to identify donors throughout the period, its large sample size, its health data and the information about the utilization of the NHS.
Results
New donors have higher intervals between donations, compared to new donors before the incentives were in place. Regular donors (two or more donations per year) also have higher intervals between donations while the incentive is in place. During this period, a higher valuation of the benefit for regular donors leads to a lower frequency of donation, conditional on fulfilling the eligibility requirements.
Donors that join the registry after the removal of the benefit donate more frequently. Regular donors are more sensitive to this withdrawal, as shown by the decrease in the frequency of donation to levels lower than the eligibility requirements, specifically for donors with a higher valuation for the ED user charge waiver. This resulted in a short-run decrease in the number of donations.
Discussion
Introducing small economic incentives increased the number of donors and donations. However, removing benefits lead a non-negligible proportion of regular blood donors to stop donating. New donors are more intrinsically motivated when monetary incentives are not in place, even more so after the removal of these incentives. These results indicate that there is an asymmetric effect of introduction and removal of economic incentives for blood donation for both regular and new donors.