Abstract
We investigate the impact of direct cash payments on whole blood donations. The German blood collection system is based on both, paid and unpaid blood donations. We take advantage of a quasi-natural experiment, in which one blood donation site changes its compensation scheme from paid to unpaid, while all other donation sites maintain their payment schemes. We show that cash payments increase donation volume without affecting blood quality. This result casts doubt on the notion that monetary incentives crowd out intrinsic motivation to donate blood. Policymakers should thus reconsider direct cash payments to address public health concerns about blood shortages.
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