Crowding Out in Blood Donation: Was Titmuss Right?

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\nclaim we carry out a field experiment with three different treatments. In the first treatment subjects are given the opportunity to become blood donors without any compensation. In the second treatment subjects receive a payment of SEK 50 (≈ $7) for becoming blood donors, and in the third treatment subjects can 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\nthere 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.

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