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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. 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.
    2. 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.
    3. Alvin E. Roth, 2007. "Repugnance as a Constraint on Markets," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 37-58, Summer.
    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

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    Cited by:

    1. 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.
    2. 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.
    3. Slonim, Robert & Wang, Carmen, 2016. "Market Design for Altruistic Supply: Evidence from the Lab," IZA Discussion Papers 9650, Institute for the Study of Labor (IZA).
    4. 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.

    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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