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The Market for Blood

Author

Listed:
  • Robert Slonim
  • Carmen Wang
  • Ellen Garbarino

Abstract

Donating blood, "the gift of life," is among the noblest activities and it is performed worldwide nearly 100 million times annually. The economic perspective presented here shows how the gift of life, albeit noble and often motivated by altruism, is heavily influenced by standard economic forces including supply and demand, economies of scale, and moral hazard. These forces, shaped by technological advances, have driven the evolution of blood donation markets from thin one-to-one "marriage markets" in which each recipient needed a personal blood donor, to thick, impersonalized, diffuse markets. Today, imbalances between aggregate supply and demand are a major challenge in blood markets, including excess supply after disasters and insufficient supply at other times. These imbalances are not unexpected given that the blood market operates without market prices and with limited storage length (about six weeks) for whole blood. Yet shifting to a system of paying blood donors seems a practical impossibility given attitudes toward paying blood donors and concerns that a paid system could compromise blood safety. Nonetheless, we believe that an economic perspective offers promising directions to increase supply and improve the supply and demand balance even in the presence of volunteer supply and with the absence of market prices.

Suggested Citation

  • Robert Slonim & Carmen Wang & Ellen Garbarino, 2014. "The Market for Blood," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 177-196, Spring.
  • Handle: RePEc:aea:jecper:v:28:y:2014:i:2:p:177-96
    Note: DOI: 10.1257/jep.28.2.177
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    References listed on IDEAS

    as
    1. Alvin E. Roth, 2007. "Repugnance as a Constraint on Markets," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 37-58, Summer.
    2. Garbarino, Ellen & Slonim, Robert & Wang, Carmen, 2013. "The multidimensional effects of a small gift: Evidence from a natural field experiment," Economics Letters, Elsevier, vol. 120(1), pages 83-86.
    3. Lacetera, Nicola & Macis, Mario, 2010. "Social image concerns and prosocial behavior: Field evidence from a nonlinear incentive scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 225-237, November.
    4. Victor Iajya & Nicola Lacetera & Mario Macis & Robert Slonim, 2012. "The Effects of Information, Social and Economic Incentives on Voluntary Undirected Blood Donations: Evidence from a Randomized Controlled Trial in Argentina," NBER Working Papers 18630, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Thesis Thursday: Sara Machado
      by Chris Sampson in The Academic Health Economists' Blog on 2017-04-20 11:00:41

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ashley C. Craig & Ellen Garbarino & Stephanie A. Heger & Robert Slonim, 2017. "Waiting To Give: Stated and Revealed Preferences," Management Science, INFORMS, vol. 63(11), pages 3672-3690, November.
    2. Ashwin Aravindakshan & Olivier Rubel & Oliver Rutz, 2015. "Managing Blood Donations with Marketing," Marketing Science, INFORMS, vol. 34(2), pages 269-280, March.
    3. Yew-Kwang NG, 2016. "Extending Economic Analysis to Analyze Policy Issues More Broadly," Economic Growth Centre Working Paper Series 1609, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
    4. Slonim, Robert & Wang, Carmen, 2016. "Market Design for Altruistic Supply: Evidence from the Lab," IZA Discussion Papers 9650, Institute of Labor Economics (IZA).
    5. Tianshu Sun & Susan Feng Lu & Ginger Zhe Jin, 2015. "Solving Shortage in a Priceless Market: Insights from Blood Donation," NBER Working Papers 21312, National Bureau of Economic Research, Inc.
    6. Goette, Lorenz & Stutzer, Alois, 2020. "Blood donations and incentives: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 52-74.
    7. Bergstrom, Ted & Garratt, Rodney & Leo, Greg, 2019. "Let me, or let George? Motives of competing altruists," Games and Economic Behavior, Elsevier, vol. 118(C), pages 269-283.
    8. Hosseini-Motlagh, Seyyed-Mahdi & Samani, Mohammad Reza Ghatreh & Cheraghi, Sara, 2020. "Robust and stable flexible blood supply chain network design under motivational initiatives," Socio-Economic Planning Sciences, Elsevier, vol. 70(C).
    9. Sun, Tianshu & Lu, Susan Feng & Jin, Ginger Zhe, 2016. "Solving shortage in a priceless market: Insights from blood donation," Journal of Health Economics, Elsevier, vol. 48(C), pages 149-165.
    10. Ai Takeuchi & Erika Seki, 2020. "Coordination and free-riding problems in the provision of multiple public goods," Discussion Papers in Economics and Business 19-15-Rev., Osaka University, Graduate School of Economics.
    11. Kim, Jaehong & Li, Mengling & Xu, Menghan, 2021. "Organ donation with vouchers," Journal of Economic Theory, Elsevier, vol. 191(C).
    12. Ai Takeuchi & Erika Seki, 2019. "Coordination and free-riding problems in blood donations," Discussion Papers in Economics and Business 19-15, Osaka University, Graduate School of Economics.
    13. Sara R. Machado, 2020. "Estimating the Blood Supply Elasticity: Evidence from a Universal Scale Benefit Scheme," Papers 2012.01814, arXiv.org.
    14. Christine L. Exley & Judd B. Kessler, 2018. "Equity Concerns are Narrowly Framed," NBER Working Papers 25326, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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