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Financial incentives for kidney donation: A comparative case study using synthetic controls

Listed author(s):
  • Bilgel, Fırat
  • Galle, Brian

Although many commentators called for increased efforts to incentivize organ donations, theorists and some evidence suggest these efforts will be ineffective. Studies examining the impact of tax incentives generally report zero/negative coefficients, but these studies incorrectly define their tax variables and rely on difference-in-differences despite likely failures of the parallel trends assumption. We identify the causal effect of tax legislation to serve as an organ donor on living kidney donation rates in the U.S. states using more precise tax data and allowing for heterogeneous time-variant causal effects. Employing a synthetic control method, we find that the passage of tax incentive legislation increased living unrelated kidney donation rates by 52 percent in New York relative to a comparable synthetic New York in the absence of legislation. It is possible that New York is unique, but our methodology does not allow us to measure accurately effects in other states.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167629615000739
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Article provided by Elsevier in its journal Journal of Health Economics.

Volume (Year): 43 (2015)
Issue (Month): C ()
Pages: 103-117

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Handle: RePEc:eee:jhecon:v:43:y:2015:i:c:p:103-117
DOI: 10.1016/j.jhealeco.2015.06.007
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505560

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  1. Gary S. Becker & Julio Jorge Elías, 2007. "Introducing Incentives in the Market for Live and Cadaveric Organ Donations," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 3-24, Summer.
  2. repec:mpr:mprres:6869 is not listed on IDEAS
  3. Lorenz Goette & Alois Stutzer, 2008. "Blood Donations and Incentives: Evidence from a Field Experiment," Working papers 2008/04, Faculty of Business and Economics - University of Basel.
  4. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(2), pages 238-249, April.
  5. Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
  6. Lacetera, Nicola & Macis, Mario & Stith, Sarah S., 2014. "Removing financial barriers to organ and bone marrow donation: The effect of leave and tax legislation in the U.S," Journal of Health Economics, Elsevier, vol. 33(C), pages 43-56.
  7. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
  8. Marcelo J. Moreira, 2003. "A Conditional Likelihood Ratio Test for Structural Models," Econometrica, Econometric Society, vol. 71(4), pages 1027-1048, 07.
  9. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
  10. Peltzman, Sam, 1973. "The Effect of Government Subsidies-in-Kind on Private Expenditures: The Case of Higher Education," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 1-27, Jan.-Feb..
  11. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
  12. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  13. Stacy Dickert-Conlin & Todd Elder & Brian Moore, 2011. "Donorcycles: Motorcycle Helmet Laws and the Supply of Organ Donors," Journal of Law and Economics, University of Chicago Press, vol. 54(4), pages 907-935.
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