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1 Sheffeld Economc Research Paper Seres SERP Number: ISSN Ignaco Abásolo Ak Tsuchya Blood Donaton as a Publc Good: An Emprcal Investgaton of the Free-Rder Problem January 2012 Department of Economcs Unversty of Sheffeld 9 Mappn Street Sheffeld S1 4DT Unted Kngdom

2 For SERPS Jan 2012 Do not cte wthout authors permsson. BLOOD DONATION AS A PUBLIC GOOD: AN EMPIRICAL INVESTIGATION OF THE FREE-RIDER PROBLEM Ignaco Abásolo 1, Ak Tsuchya 2 1 Departamento de Economía de las Insttucones, Estadístca Económca y Econometría, Facultad de Cencas Económcas y Empresarales. Unversdad de La Laguna, Campus de Guajara La Laguna. Tenerfe. Span. <abasolo@ull.es> 2 Department of Economcs and School of Health and Related Research, Unversty of Sheffeld, 30 Regent Street, Sheffeld, S1 4DA, Unted Kngdom. <a.tsuchya@sheffeld.ac.uk> Abstract A voluntary blood donaton system can be seen as a publc good. People can take advantage wthout contrbutng, whch leads to the so called free-rder problem. An emprcal study s undertaken to analyse the extent of free-rdng and ts determnants n ths context. Intervews of the general publc n Span (n=1,211) ask whether respondents are (or have been) regular blood donors; and f not, the reason. Free-rders are defned as those ndvduals who have no medcal reason that dsables them to donate blood and are not blood donors. We dstngush four dfferent categores of free-rders dependng on the reason gven for not donatng. Bnomal and multnomal logt models are specfed to estmate the effect of ndvdual characterstcs on both the propensty to free-rde and the lkelhood to belong to one of the free-rder categores. Model estmates show that amongst those ndvduals who are able to donate, there s a 67% probablty of beng a free-rder. The most lkely free-rder s female, sngle, wth prmary school or no educaton and who abstaned n the 2004 electons. Gender, age, relgon practce, poltcal partcpaton, and ncome of the regon of resdence are found to be background varables that explan the type of free-rder. [200wds] Key words: free rder, blood donaton, publc good 1

3 1. INTRODUCTION Under a voluntary blood donaton system, supply of blood depends on enough ndvduals gvng for no fnancal reward. However, as Culyer (1973) states, unlke gfts between ndvduals wth an underlyng relatonshp, donatng blood for transfuson to strangers s a matter of collectve gvng, whch can be looked at as a publc good. As a consequence, there arses an ncentve to free-rde : wth collectve gvng what becomes sgnfcant s need. Meetng such needs accordngly takes on the aspects of a publc good f one person meets the need of another there s a very hgh probablty that others (besde the benefcary) wll agree the need has been met. There s accordngly a strong nclnaton for them to leave t to others to meet the need. They wll beneft from the ndvsble benefts of the publc good, a juster socety, wthout havng to dvert resources from ther own (non-publc) consumpton to mtgate the need. They get a free rde. In such crcumstances, a serous shortage n the degree to whch agreed needs are met s clearly possble, so that all wll lose. (Culyer, 1973; pp.52-53) The extent to whch such shortage threatens the optmal provson of the publc good s somethng that s analysed n the lterature leadng to two versons of the free-rder hypothess. Under the strong verson, people do not contrbute at all, so the publc good s not provded. The weak verson predcts that people contrbute less than the Pareto optmal amount necessary to supply a publc good but more than zero (Lpford 1995). The extent of the free-rder problem s also related to the sze of the group (Olson, 1965; Chamberln, 1974; Lpford, 1995; Brunner, 1998). The general fndngs on free-rdng n the lterature vary across studes. Some show evdence on the strong free-rder hypothess such that free-rdng s overwhelmng (see for example, Dawes et al, 1977; Km and Walker, 1984). On the other hand, several authors fnd that people free-rde but not to the extent predcted by economc theory (e.g. Marwell and Ames, 1979; Dawes and Thaler, 1988; Andreon 1990, 1995). A further fndng ndcates that whle people do not free-rde n sngle-short games (see for example Marwell and Ames, 1981), 2

4 people do tend towards free-rdng n repeated games (for example Andreon, 1988; also see Eckel et al, 2005, on crowdng out of chartable gvng). Most of ths lterature s based on expermental economcs. One dsadvantage of analysng the free-rder hypothess through expermental settngs s that t s based n hypothetcal scenaros and ts conclusons mght not mrror what happens n the real world; n addton, experment partcpants may not be a representatve sample of the whole populaton, whch s crucal f we want to nvestgate further the types of free-rdng and ther soco-economc determnants. One way to overcome such drawbacks s through non-expermental survey data and the desgn of approprate questonnares. In ths paper we study possble free-rdng n the blood donaton context through face to face ntervews undertaken n Span. Note that most of the lterature on blood donaton look at donaton and ts determnants (e.g. Healy, 2000; Hollngsworth and Wldman, 2004; Steele et al., 2008; Wldman and Hollngsworth, 2009). In contrast to ths, we look at those who do not donate and thus who are free-rders, rather than to those who do donate. Ths s because we focus on the determnants to free-rde, dstngushng between dfferent types of free-rder accordng to the reason gven for not donatng. Of partcular mportance n ths context s to dfferentate from the rest those ndvduals who are not elgble to donate blood (and thus not capable of free-rdng) due to some medcal reason. To focus on the donors wll n effect group these ndvduals together wth the other non-donors and as a result rsk overestmatng the free-rdng problem. We conduct a survey of a representatve sample of the general publc n Span 1 and ask () whether they are (or have been) a regular blood donor, and () f not, why. Our objectves are: to examne whether or not free-rdng behavour actually exsts n the blood donaton context and f t does, to what extent; to explore the ndvdual characterstcs that explan free-rdng behavour; and to analyse the reasons to free-rde alongsde the background characterstcs that determne such dfferent reasons. We do not dstngush between the mplcatons of dfferent blood types or the varous blood products (whole blood, red cells, plasma, and other blood based products). Furthermore, we do not dstngush between those who are current regular blood donors and those who have been regular blood donors n the past, or ndeed between self-reported regular blood donors and actual regular blood donors. In what follows, secton 2 explans the methods and data, 1 In Span, blood donatons are voluntary wth no monetary (or n-knd) remuneratons (RD 1854/1993 and RD 1088/2005). In the year of our survey, 2004, the donaton ndex (no. of donatons per 1,000 populaton) was 39.6 (INE 2008), whch s around the average donaton rate for developed countres (38.1; WHO, 2009). 3

5 secton 3 presents the results, followed by a dscusson n secton 4, and conclusons n secton METHOD AND DATA The relatonshp between publc goods and free-rdng s formulated by Andreon (1990) through the followng model. Let us assume that we have one prvate good x and one publc good G (.e. the stock of blood from a voluntary system) n an economy of n ndvduals, wth the followng utlty functon: U = U ( x, G ) = 1 n [1] U s strctly quas-concave and ncreasng n x and G. The amount of publc good s determned by the total contrbuton by the n members of the economy: G = n = 1 g [2] Under [1], utlty of ndvdual depends only on prvate consumpton and the total supply of the publc good: ths s the pure altrust model. Now, because G s a functon of g j (j ) as well as g, f other people already make enough contrbutons (or f ndvdual beleves that others do), then ths leads to an ncentve to freerde. Furthermore, f the sze of the group s large, then the proporton of those contrbutng tends to zero (Andreon 1988), thus confrmng the strong verson of the free-rder hypothess, where nobody donates. Ths model would not be able to explan how, n realty, a suffcently large proporton of people donate blood. Alternatvely, Andreon (1990) consders a model of donaton wth warm glow. At the opposte extreme of preferences lke those shown n [1], he consders the exstence of egostc preferences that s, ndvduals for whom the only motvaton for donatng s ther own warm glow, arsng from g : U = U x, g ) [3] ( Under [3], where U s strctly quas-concave and ncreasng n x and g, there would be no ncentves to free-rde because ndvduals do not beneft from the publc good tself. 4

6 Between these two unrealstc extremes of pure altrusm and egosm, Andreon (1990) specfes an mpure altrust model whch assumes that people care about the publc good but also receve a warm glow: U = U x, G, g ) [4] ( As noted by Brunner (1998), under ths model, free-rdng wll depend on the relatve strength of each of these motves: f ndvduals are motvated prmarly by altrusm, free-rdng wll be pervasve whlst f ndvduals are motvated by egosm, free-rdng wll be mnmal. We defne free-rders as those ndvduals who are medcally able to but decde not to donate blood, and therefore who would beneft from the blood stock any tme they need t, wthout contrbutng to t. To dentfy those elgble to donate, we exclude those who have a health problem or a medcal condton that dsables them from donatng blood. Undertakng the analyss wthout excludng ths group of the populaton would lead to an overestmaton of the free-rder problem. Fgure 1 llustrates the process of free rdng, followng a seres of stages, as suggested by the exposton above. Pror to the frst stage, ndvduals are screened accordng to whether they have any medcal reason that mpedes them to donate blood. Snce ths s not a matter of ndvdual choce, ths screenng s not modelled, and those who have a medcal reason are dropped from further analyss. Out of those who do not have any medcal reason for not donatng, n the frst stage, we dstngush between those who are (or have been) regular blood donors, and those who are not (or have not been), where the latter are defned as free-rders. In the second stage, free-rders are categorsed accordng to the reason for not donatng: others already do t, fear of needles, not thought about t and gves no reason An emprcal model for free-rdng In the frst stage, we look at those who are capable of donatng blood by specfyng an emprcal model that explans the probablty to free-rde n the blood donaton context, n terms of those ndvdual characterstcs that are expected to affect free-rdng. An underlyng * (or latent) varable ( F ) represents an ndvdual s propensty to be a free-rder. Thus, the model can be wrtten as follows: 5

7 F = * z β + ε [5] where the subscrpt represents ndvdual respondents, z are the covarates, represents the parameters and s the random error term. In practce, * F s unobserved. Instead, we observe F whch s a dummy varable representng whether or not the ndvdual free-rdes. A utlty maxmsng ndvdual who s medcally capable of donatng blood would choose to free-rde f the utlty derved from ths choce exceeds the utlty of donatng blood. Pr( F = 1 z) = Pr( U1 > U 0) [6] If the utlty of free-rdng s greater than that of donatng (U 1 > U 0 ) s/he would choose to free-rde (F = 1), and f otherwse(u 1 U 0 ) s/he would not choose to be a non-donor (F = 0; and therefore would donate blood). The estmaton process s undertaken through logt regressons. So, we assume that s dstrbuted logstcally, leadng to the followng bnary logt model: Pr( F exp( zβ ) = 1 z ) = [7] 1+ exp( z β ) Lkelhood rato (LR) tests and Reset specfcaton tests are carred out to apprase the approprateness of the dfferent functonal forms. Estmatons of equaton [7] allow us to emprcally assess the relevance for free-rdng of the dfferent hypothessed explanatory varables. Regardng the latter, we antcpate that demographc, soco-economc and other ndvdual characterstcs are assocated wth people s atttudes between donatng and free-rdng (see for example Hollngsworth and Wldman, 2004; Wldman and Hollngsworth, 2009; Steele et al, 2008). Frst, we may expect there to be some pattern by respondents soco-economc status: educatonal qualfcaton and ncome per capta of the regon of resdence are consdered as proxes for socoeconomc status. Second, some prevous studes support the proposton that the free-rder problem ncreases as group sze ncreases (Olson, 1965; Sweeney, 1973), therefore we also consder sze of area of resdence as a proxy for group sze. Thrdly, a 6

8 further nterest s the role of poltcal partcpaton, whch we nterpret as a proxy for the ndvdual s level of engagement wth the communty. Fourthly, membershp n relgous organsatons and church attendance correlate wth volunteerng n general (Greeley, 1997), so we consder not practcng relgon as another varable that mght explan free-rdng. Fnally, amongst the demographc varables, age, gender and martal status are consdered An emprcal model for reasons to free-rde In the second stage we look exclusvely at those ndvduals who free-rde. We dstngush dfferent types of free-rders accordng to the reasons they gve for not donatng blood. We dstngush four dfferent categores of free-rders: those who report that they do not donate because others already do t; those who plead that they have an averson to needles; those who have not thought about t; and those who do not gve any reason or say that they do not know. The frst group may be called the self-admtted free-rders, and they are used as the base case. We specfy a model to estmate the probablty of beng of one or another type of free-rder and to estmate the effect of background characterstcs on ths. A multnomal logt model (MNLM) s estmated, whch apples to dscrete dependent varables that can take (unordered) multnomal outcomes representng the reasons for free-rdng: y = 1, 2,.m. Gven a set of bnary varables defned to ndcate whch reason (j=1,.,m) s reported by each free-rder ndvdual (= 1,,n). y j = 1 f y = j; 0 otherwse, wth assocated probabltes P(y =j) = P j. Then, the MNLM uses, P j = exp( z k β j [8] exp( z β ) ) k where k s the number of reasons to choose from by the free-rders. Wth a normalzaton that m = 0, whch reflects the fact that only relatve probabltes can be dentfed, wth respect to the base alternatve m (Jones, 2000). The dependent varable takes one of four values dependng on the reason gven for not beng a regular blood donor: Y = 1 f the ndvdual reports that others already do t ; Y = 2 f the 7

9 ndvdual reports I have an averson to needles ; Y = 3 f the ndvdual reports I have not thought about t ; and Y = 4 f the ndvdual reports I have no reason or I do not know. One reason s recorded for each free-rdng respondent. Therefore, the MNLM would dentfy the probablty of beng of a partcular free-rder category relatve to the reference outcome ( others already do t ). We consder the same set of covarates (z) as n the prevous freerdng model. The MNLM assumes ndependence of rrelevant alternatves (IIA). That s, f we consder the rato of the probablty of two dfferent reasons to free-rde k and l, IIA mples that the relatve probablty depends only on the characterstcs of the two reasons and not on any of the other reasons (.e. f a new alternatve s ntroduced, all of the absolute probabltes wll be reduced proportonally so that the relatve probabltes between k and l reman unaffected). We test for ts approprateness usng the Hausman and Small-Hsao tests, by frst estmatng the model wth all of the four reasons for free-rdng, and subsequently re-estmatng t by droppng one of the reasons. Ths s then followed by the tests for IIA (see Scott and Freese, 2001). If IIA s volated, an alternatve model should be consdered (such as the nested multnomal logt or the multnomal probt model) that relax the IIA property. In addton, a Wald test s conducted to explore whether or not combnng some of the response categores would make the model more effcent Data and varables defnton The data were collected durng 2004 n Span. A survey of 1,211 ndvduals over 18 years of age was undertaken. Face to face ntervews were assgned across the 17 Comundades Autónomas ( Regons for short), reflectng the local resdent populaton proportonally. Wthn each of the Regons, ntervews were randomly allocated so that the acheved sample s representatve of the general Spansh populaton n terms of soco-demographc characterstcs. In general, 48% of the ndvduals are male, wth average age of (SD 18.10); and 52% female, wth average age of (SD 18.04). The questonnare has questons on demographc and socoeconomc characterstcs of the respondents as well as a queston on blood donaton, where the respondent s asked whether s/he s, or has been, a regular blood donor; no defnton of regular blood donaton s gven. Those who reply no are asked to select ther man reason for t from a short lst. Those who select because of medcal reasons at ths stage are excluded from all analyss, snce 8

10 donatng or otherwse s not wthn ther choce and thus they do not enter the model for freerdng. The bnary dependent varable n the logt model, free-rde, takes the value 1 f ndvdual s a free-rder (.e. the ndvdual s not or has not been a regular blood donor, although they could be), 0 f otherwse (.e. the ndvdual s or has been a regular donor). The reasons for not donatng are recorded by a set of categorcal varables: others_do_t (for those ndvduals who say because others already do t); aver_needles (for those who report havng a fear of needles); have_not_thought (for those who report not havng thought about t); and don t_know (for those who do not gve any reason). There s an opton for other reasons but snce ths s selected by only fve respondents, t s dropped from the analyss. One reason s recorded for each non-donatng respondent. The baselne category s others_do_t. Regardng the ndependent varables, age enters the model as a contnuous varable. The bnary varable female ndcates whether or not the ndvdual s female. Educaton s recorded by the level of schoolng and has been categorsed n three dummy varables representng low educaton prmary_studes (those wth prmary school educaton or less: the baselne category), mddle educaton secondary_studes (those wth secondary school educaton), and hgh educaton unversty_studes (those wth hgher and unversty educaton). Cvl status s ndcated by sngle (the baselne), marred and dvorced_wdowed. Populaton sze of the area of resdence s proxed by small_area ndcatng whether the ndvdual lves n an area of 10,000 or less nhabtants. The varable abstenc ndcates that the ndvdual dd not vote n the March 2004 natonal electon (the most recent at the tme of the survey). Per capta ncome of the regon of resdence s recorded by three dummy varables representng low ncome regon (reglow), mddle ncome regon (regmd) and hgh ncome regon of resdence (reghgh: the baselne category). Fnally, the bnary varable no_relg ndcates whether the respondent does not practce any relgon. 3. RESULTS Table 1 shows the summary statstcs of the dfferent samples used n the analyss. Out of the 1,211 partcpants n the survey, tem non-response leads to 184 mssng cases, whch corresponds to 15% of the entre data, leavng 1,027 vald cases. Of these, 264 ndvduals report that they cannot donate blood because of medcal reasons, so they are excluded from the analyss. Ths leaves 763 usable cases, of whch 509 are free-rders (.e. 67% of usable cases). As can be seen, the dstrbuton of background characterstcs across the whole sample 9

11 and the smaller samples used for the analyses are smlar. Wth respect to the group of nterest (.e. free-rders; n=509), mean age s 44 and about half of them are female; regardng the reasons to free-rde, 22% choose because others already do t, 10% averson to needles, 20% have not thought about t, and 48% gve no reason (see last column of table 1). Table 2 reports (n odds ratos) the results of the logt regresson that descrbes ndvduals propensty to free-rde. The model passes the Reset specfcaton test, ndcatng that there s no evdence of functonal form problems. Results show that females have a sgnfcantly hgher propensty to free-rde than men: the relatve rsk of free-rdng s 45% hgher n females than n males (p<0.05). Smlarly, those who dd not vote n the 2004 electons have almost a 60% hgher relatve rsk of beng freerders than those ndvduals who voted (p<0.05). On the other hand, the level of educaton s negatvely correlated wth the propensty to free-rde, wth a clear gradent: ndvduals wth secondary school educaton have a 44% lower relatve rsk to free-rde compared to those wth prmary school educaton or less (baselne) (p<0.1), whlst ndvduals wth unversty educaton have almost a 60% lower relatve rsk to free-rde (p<0.05). Fnally, beng dvorced or wdowed s also negatvely correlated wth free-rdng (p<0.1). Age, ncome of the regon of resdence, or sze of area of resdence do not have sgnfcant mpacts on the probablty to free-rde. Fgure 2 plots the mean values of the predcted probabltes of beng a free-rder for each background characterstc, under the counterfactual that the whole sample takes the characterstc n queston, whle retanng ther other characterstcs. For example, for males, the probablty of free-rdng s predcted for each ndvdual assumng they were all male regardless of ther actual gender, but keepng ther martal status, educaton, etc unchanged. Ths exercse results n the hghest mean probabltes of free-rdng when the whole sample s assumed to be ether female (71%), sngle (71%), had low educaton (74%), or dd not vote n the 2004 general electon (74%). The combnaton assocated wth the hghest probablty of free-rdng (older sngle women, wth low educaton, lvng n a nonsmall area wth low capta ncome, who dd not vote) results n a 88% propensty to free-rde, whle on the other hand the least lkely combnaton has a 42% propensty. Regardng the MNLM on the reasons why respondents free-rde, the Small-Hsao and Hausman tests cannot reject the null hypothess that IIA holds (p<0.05), and therefore the use 10

12 of MNLM s approprate. Furthermore, the Wald test for combnng alternatve reasons rejects the null hypothess that any par of reasons for free-rdng are ndstngushable (p<0.05). Table 3 shows the dscrete changes n the probablty of a free-rder gvng a partcular reason not to donate. The fgures shown n the table correspond to the mean of dscrete changes n the probablty of gvng each reason not to donate. It can be seen that the four response categores have dfferent patterns, as suggested by the Wald test for combnng alternatve reasons mentoned above. Regardng those free-rders that ndcate that they do not donate because others already do t, the predcted probablty of gvng ths reason (Y = 1) s lower for each year of the ndvdual s age, hgher for marred than sngle ndvduals, lower for non-relgous than relgous, and lower for resdents n a low ncome regon than n a hgh ncome regon (all of them at p<0.05). The predcted probablty of pleadng an averson to needles (Y = 2) s hgher for females than males, lower for dvorced or wdows than for sngles, and lower for those who abstaned n the 2004 electons than those who voted. Regardng those who say they have not thought about t (Y = 3), the predcted probablty of gvng ths reason s hgher for the non-relgous than relgous. Fnally, the predcted probablty of not gvng a reason (Y = 4) s hgher for each year of age, hgher for those wth secondary school educaton than wth prmary school educaton or less, hgher for those who abstaned and for those who lve n relatvely small areas. 4. DISCUSSION Ths study s based on a large scale face-to-face ntervew survey of a representatve sample of the general publc n Span. The ntervews ncludes a set of questons on whether or not the respondent s (or has been) a regular blood donor, and f not, for what reason. In the frst stage, usng a logt regresson to explan free-rdng, we conclude that out of those who are medcally capable of donatng, not everybody free-rdes, as would be expected from an economc model of pure altrusm. Instead, there s a two-to-one splt between free-rders and contrbutors, whch s more n lne wth the mpure altrusm model. In addton, ndvdual propensty to free-rde s sgnfcantly explaned n terms of gender, educaton, poltcal partcpaton and martal status. Other studes also observe that females or those wth lower educaton are more lkely to be non-donors (eg. Healy, 2000; Chlaoutaks et al, 1994); and those who dd not vote n the electons are more lkely to free-rde, suggestng that the 11

13 nvolvement n the communty s not only assocated wth atttudes to publc goods n general but also wth the blood donaton context. On the other hand, n contrast to prevous evdence (Olson, 1965; Sweeney, 1973), the sze of the area of resdence s not sgnfcant. However, gven that ths varable only captures whether populaton sze s 10,000 or less, t does not rule out lower thresholds leadng to a sgnfcant mpact. The effect of relgous practce s not sgnfcant ether. Elsewhere, Healy (2000) fnds that regular church attendance s postvely and sgnfcantly assocated wth the lkelhood of donaton but only where the Red Cross runs the blood supply; the effect of church attendance s not sgnfcant under other systems, or even negatve n Norway and Denmark (Healy, 2000). Thus, overall, the exercse ndcates that free-rdng s clearly not dstrbuted randomly across the potental donors. Other factors not avalable n ths analyss concernng nsttutonal characterstcs and cultural factors mght also nfluence the lkelhood of free-rdng. In the second stage, we estmate a multnomal logt model that explans the reasons gven by the free-rders for not donatng. In summary, gender, age, relgous practce, poltcal partcpaton and ncome of the regon of resdence are found to explan the reason for free rdng. The results also ndcate that the set of determnants for gvng a partcular reason for not donatng vary across the four reasons avalable n the questonnare. For example, those who state an averson to needles are more lkely to be females than those who gve other reasons. Those who do not gve any reason are more lkely to be those who dd not vote n the past electons. Curously, the effect of relgon has a dfferent sgn dependng on the reason for not donatng: those who state that others already donate are more lkely to practce a relgon, but those who have not thought about t are more lkely to not practce relgon. Whle the study s conducted on a large-scale representatve sample of the general publc, there are a few thngs that should be taken nto account before the fndngs can be generalsed. Intervew surveys may be crtcsed on two fronts. Frst, compared to analysng real choces revealed through actual donaton behavour, ntervew surveys are vulnerable to bases ntroduced by recall or the presence of an ntervewer. However, ths paper explctly dstngushes between non-donaton by choce (free-rdng) and mposed non-donaton (due to medcal reasons), as groupng those who cannot donate wth those who choose not to donate would overestmate the free-rder problem. Ths dstncton requres more nformaton beyond whether or not somebody donates, and justfes the ntervew approach. Second, compared to expermental settngs, where relevant scenaros can be manpulated to explore the relevant parameters under whch partcpants wll agree or not agree to donate blood, ntervews are 12

14 very crude. However, the objectve of ths paper s to probe about ther real world behavour and to ask for ther reasons for t, whch s better suted to ntervew surveys. Nevertheless, t remans that the data on free-rdng and ts reasons are self-reported, whch has three factors for consderaton. Frstly, our frst queston s desgned to consder both current and past regular donors, and therefore the proporton of donors n our study (about 33% of potental donors, or 24% f we nclude those who cannot donate n the denomnator) s hgher than publshed statstcs that are based only on current donors (about 5%). Ths s as expected, but admttedly makes external verfcaton dffcult. Secondly, the presence of an ntervewer may have based the responses towards what s perceved as more socally acceptable: vz. to self-report as a blood donor. Combnng these two factors, at the extreme, anybody who has ever donated blood may have reported themselves to be a regular blood donor, even when they have done so just once n ther lves 2. Insofar as ths s the case, our results would be underestmatng the free-rder problem. Thrdly, dfferent respondents may have had dfferent perceptons of what consttutes regular blood donaton, and f there s a systematc pattern across respondent subgroups, then the results would be affected by ths. Wth regard to the reasons for free-rdng there are two ssues to note. Frst, agan, the presence of the ntervewer may have affected the respondent to select reasons that potentally appear more socally acceptable, by clamng to have a medcal reason or not to have thought about t, rather than to admt to a fear of needles or to say others do t. Second, regardng the reasons avalable to the ntervewee for free-rdng, some respondents may have found that ther reason for not donatng was not offered as an opton. For example, some may fnd access to the relevant facltes problematc, or ndeed may be wllng to sell blood for a fnancal reward but not to gve away. However, ths s not a major problem because the opton other reasons s also gven and taken by just 0.4% of the survey respondents. On the other hand, the opton have not thought about t may appear too smlar to not gvng a reason. The statstcal evdence reported above nevertheless suggests that the categores used n the MNLM cannot be regarded as undstngushable from each other. And fnally, a free-rder may have more than one reason for not donatng blood: for example, somebody wth an averson to needles may, as a result, not thnk about donatng blood. In ths study, the ntervew has only coded the frst reason people chose out of the set of reasons presented, whch we nterpret as the man reason. 2 In fact, the proporton of donors who are (or have been) a regular blood donor n our study s close to the proporton of ndvduals who have ever gven blood n Span (24%) reported n Healy (2000). 13

15 A related ssue s the relatonshp between free-rdng of some and altrustc behavour of others. Arrow (1972) for nstance assumes that the creaton of a market smply ncreases ndvduals range of optons, thus leadng to hgher benefts for all concerned (also see Snger, 1973). However, Ttmuss (1970) argues that ths would erode altrustc behavour. One way to examne ths would be to carry out a study wth two samples: one from a donaton based system and another from a mxed system lke the one proposed by Arrow, and to compare () the levels of free-rdng n the two systems, () the prevalence of those who freerde because others already donate, and () the prevalence of those who free-rde because others already are pad for that (.e. n the market). CONCLUSION Voluntary blood donaton s a publc good, and s susceptble to free-rdng. Based on ntervew data, we explore the extent of the free-rder problem and the dfferent reasons gven for t n the context of blood donaton. In order to avod the overestmaton of free-rdng, we dstngush between those who can but do not donate from those who cannot donate for medcal reasons, excludng the latter group. The determnants of free-rdng ndcate that the propensty to free-rde s assocated wth certan background characterstcs, and thus freerders are not randomly dstrbuted wthn the populaton. Furthermore, the determnants of the reasons for free-rdng suggest that the four reasons offered n the questonnare can be regarded as dstnct reasons, and each are assocated wth ther own set of sgnfcant covarates, ndcatng that free-rders are a heterogeneous group. 14

16 ACKNOWLEDGEMENTS The authors are grateful to Juan Dez-Ncolas, all the respondents who agreed to take part n the survey, and also to the Spansh Insttuto de Estudos Fscales for fnancal support to undertake ths research. We would also thank to Paula Lorgelly for her dscusson of a prevous verson of ths paper at the July 2009 Health Economsts Study Group conference, and partcpants of the XXIX Jornadas de Economía de la Salud n June 2009 for ther comments. Specal thanks are due to Tony Culyer for hs encouragement. We are also grateful to José Cáceres, Vctor Cano, Andrew Dckerson, Beatrz González, Jeffrey Harrs, Arne Rsa Hole, Carolna Rodríguez, and Peter Wrght for ther comments. The usual dsclamers apply. 15

17 REFERENCES Andreon J. (1988) Why free-rde? Strateges and learnng n publc goods experments, Journal of Publc Economcs, 37: Andreon J. (1990) Impure altrusm and donatons to publc goods: a theory of warm-glow gvng. The Economc Journal, 100: Andreon J. (1995) Cooperaton n Publc-Goods Experments: Kndness or Confuson? Amercan Economc Revew, 85 (4): Arrow K. (1972) Gfts and exchanges, Phlosophy and Publc Affars, 1(4): Brubaker E.R. (1975) Free-rde, free revelaton, or golden rule? Journal of Law and Economcs, 18: Brunner E. J. (1998) Free rders or easy rders?: an examnaton of the voluntary provson of publc rado, Publc Choce, 97: Chamberln, J. (1974) Provson of publc goods as a functon of group sze. Amercan Poltcal Scence Revew, 68 (2): Chlaoutaks J., Trakas D., Socratak F., Lemondou C., Papaoannou D. (1994). Blood donor behavour n Greece: mplcatons for health polcy. Socal Scence and Medcne, 38 (10): Culyer A.J. (1973) Quds wthouth quos a praxeologcal approach. Alchan A.A. et al. (eds.) The economcs of charty. IEA. London, pp Dawes R.M., McTavsh J. Shaklee H. (1977) Behavor communcaton and assumptons about other people s behavor n a commons dlemma stuaton, Journal of Personalty and Socal Psychology, 35(1): Dawes, R.M. Thaler, R.H. (1988) Cooperaton. Journal of Economc Perspectves, 2(3): Eckel C.C., Grossman PJ, Johnston RM (2005) An expermental test of the drowdng out hypothess, Journal of Publc Economcs, 89, Greeley, A. M. (1997) The other cvc Amerca: relgon and socal captal. The Amercan Prospect, 32 (May-June): Healy K. (2000) Embedded altrusm: blood collecton regmes and the European Unon s donor populaton. Amercan Journal of Socology, 105 (6): Hollngsworth B. Wldman J. (2004) What populaton factors nfluence the decson to donate blood?. Transfuson medcne, 14: INE (2008) Insttuto Naconal de Estadístca. Natonal Statstcs Insttute. Spansh Statstcal Offce 16

18 Jones A. (2000) Health Econometrcs. Handbook of Health Economcs, vol. 1a. Culyer A, Newhouse J eds. Elsever Scence. Amsterdam. Km O. Walker M. (1984) The free rder problem: expermental evdence. Publc Choce, 43: Lpford J.W. (1995) Group sze and the free-rder hypothess: an examnaton of new evdence from churches. Publc Choce, 83: Marwell G., Ames R.E. (1979) Experments on the provson of publc goods (I): resources, nterest, group sze and the free rder problem. Amercan Journal of Socology, 84: Marwell G., Ames R.E. (1981) Economsts free-rde, does anyone else? Journal of Publc Economcs, 15: Olson M. (1965) The logc of collectve acton, Harvard Unversty Press, Cambrdge. Real Decreto 1088/2005 de 16 de septembre, por el que se establecen los requstos técncos y condcones mínmas de la hemodonacón y de los centros y servcos de transfusón. BOE 225. Real Decreto 1854/1993 de 22 de octubre por el que se determna con carácter general los requstos técncos y condcones mínmas de la hemodonacón y bancos de sangre. BOE 278. Scott J. and Freese J. (2006) Regresson models for categorcal dependent varables usng stata. Stata Press. Texas. Snger P. (1973) Altrusm and commerce: A defence of Ttmuss aganst Arrow, Phlosophy and Publc Affars, 2(3): Steele W.R., Schreber G.B., Gultnan A., et al, (2008) The role of altrustc behavour, empathetc concern, and socal responsblty motvaton n blood donaton behavour, Transfuson, 48: Sweeney J. (1973) An Expermental Investgaton of the Free-Rder Problem, Socal Scence Research, 2, Ttmuss R. (1970) The Gft Relatonshp: From Human Blood to Socal Polcy. George Allen & Unwn, Oxford. WHO (2009) Blood safety and avalablty: facts and fgures from the 2007 blood safety survey, Fact Sheet nº 279, November. Wldman J. Hollngsworth B. (2009) Blood donaton and the nature of altrusm. Journal of Health Economcs, 28:

19 TABLES AND FIGURES Whole sample (1) TABLE 1: SUMMARY STATISTICS Vald cases sample (2) Sample used n logt model (3) Sample used n MNLM (4) Varable N Mean N Mean N Mean N Mean Female Age Sngle Marred Dvorcy_wd Prmary_le~s Second_stu~s Unversty~s Reghgh Regmd Reglow No_relg Abstenc Small_area Free_rder Others_do_t Aver_needle Haven t_tho~t Don t_know (1) Number of observatons avalable for each varable (2) Excludes 184 ndvduals who have mssng values n any of the relevant varables (3) Excludes those ndvduals who are unable to donate due to medcal reasons (4) Excludes those ndvduals who are blood donors 18

20 TABLE 2: LOGIT ESTIMATION OF FREE-RIDING IN BLOOD DONATION 95% Odds Rato Conf. Interval Female (**) Age Marred Dvorc_wd.513 (*) Second stud.660 (*) Unversty stud.412 (**) Regmd Reglow No_relg Abstenc (**) Small_area N=763; wald ch2(11)=30,29; Prob >ch2=0.001; Log pseudolkelhood = ; Pseudo R2 = Reset test: ch2(1)=0.13; prob>ch2=0.718 ** p-value <0.05 * p-value <0.1 TABLE 3: MNLM DISCRETE CHANGES P(Y = 1) P(Y = 2) P(Y = 3) P(Y = 4) Female ** -.061*.028 Age -.005** ** Marred.106** Dvorc~wd ** Second~stud ** Unver~stud * Regmd.083*.059* Reglow -.123** No_relg -.124** ** Abstenc -.073* -.051** ** Small area *.116** Y (1= others already do t; 2= averson to needles; 3=have not thought t; 4= don t know/answer) ** p-value <0.05 * p-value <0.1 19

21 FIGURE 1: THE PROCESS OF FREE-RIDING Medcal reason not donatng blood? Yes No: potental blood donor (=potental free-rder) Excluded from analyss Is, or has been, a regular blood donor? Yes: Blood donor No: Free-rder Reason for not donatng? Others already do t Fear of needles Not thought about t Gves no reason FIGURE 2. AVERAGE PREDICTED PROBABILITIES OF BEING A FREE-RIDER BY DIFFERENT RESPONDENT CHARACTERISTICS (*) The dfference of average predcted probabltes amongst categores of the varable comes from the correspondng parameter n the logt estmates that resulted statstcally sgnfcant 20