Paying for Blood: Titmuss Was Half Right

Sweden paid people to give blood and female donors nearly halved. America handed out T-shirts and donations rose. Both are right — the difference is the point.

Richard Titmuss published The Gift Relationship in 1970 with a claim that annoyed economists for the next forty years. Pay people to give blood, he argued, and you will end up with less blood, not more. The money does not add to the motive. It replaces it.

Economists found this hard to swallow, because it violates the most basic thing they believe: raise the price, get more supply. For decades the argument stayed an argument, because nobody had run the experiment.

Then two Swedish economists ran it.

What Gothenburg found

Mellström and Johannesson set up three groups. One was simply offered the chance to become a blood donor. The second was offered the same thing plus 50 kronor, roughly seven dollars. The third was offered the 50 kronor with a twist — they could keep it, or send it to charity.

Among men the three groups behaved about the same. The money neither helped nor hurt in any way the data could pick up.

Among women, the supply of donors fell by almost half once payment entered the picture. The crowding-out was not spread thinly across everyone — it was concentrated.

That is the finding everyone repeats, and it did make Titmuss look prescient. But the third group is the part worth sitting with, and almost nobody quotes it. Letting people give the money away rather than pocket it wiped out the crowding-out effect entirely. Same money. Same amount. The damage came from what accepting it would have meant, not from the payment existing.

Then the Americans got a different answer

Lacetera, Macis and Slonim went at the same question with American data — fourteen thousand blood drives, half a million donations, plus a field experiment of their own. Offer a T-shirt, a jacket, a coupon, a gift card, and donations at that drive rose by fifteen to twenty percent. More reward, more blood, exactly as the textbook says.

Two careful field experiments, two opposite results. This is where most write-ups declare the science unsettled and stop.

I do not think it is unsettled. I think the two studies are measuring different things and both are right.

A T-shirt is not cash. It arrives framed as a thank-you, and a thank-you does not contradict the reason you came. Fifty kronor in your hand at a Swedish clinic reads as a price, and a price invites you to ask whether the thing is worth doing at that price. Once you are asking that question the answer is often no. An hour of your time is worth more than seven dollars, and now you have said so out loud to yourself.

What the incentive studies do not show

The American research turned up something that gets left out of the summaries. Drives offering rewards pulled donors away from nearby drives that did not. People shifted where and when they gave rather than giving more overall, and the effect did not persist. A local rise in donations is not the same as a national rise in blood.

The Swedish result has its own limits. It measured people signing up to become donors, not years of showing up, and it ran in one city. Take the men-versus-women split with a fistful of salt: it is the most quoted part and the least replicated, which is usually the order those two things come in.

What survives from both is narrower than either headline. How you offer a reward matters more than whether you offer one.

Why this sits badly with anyone building for volunteers

Every platform that wants people to do something good eventually reaches for points, badges, streaks, referral bonuses. The instinct is that a little reward cannot hurt, and if it does not help, nothing is lost.

The Gothenburg result says something can be lost. The mechanism is not mysterious: the moment a reward makes someone ask "is this worth my time for that amount", a gift has become a transaction, and gifts do not survive that conversion. Nobody weighs whether helping a neighbour move a sofa is worth their hourly rate. Offer them forty kronor for it and suddenly they might.

There is a version that works, and Gothenburg found it more or less by accident. The charity arm kept the recognition and threw away the price tag.

We build a map of good deeds, so this is not a neutral observation for us — it is the argument for why the thing people earn here is visibility rather than a payout. That could be wrong. But the one experiment that has actually tested it points that way.

Sources: Mellström, C. & Johannesson, M., "Crowding Out in Blood Donation: Was Titmuss Right?", Journal of the European Economic Association, vol. 6, no. 4 (2008). Lacetera, N., Macis, M. & Slonim, R., work on incentives and blood donation published in the American Economic Journal: Economic Policy; the 15–20 percent figure and the displacement finding are as reported by the University of Toronto Mississauga. Titmuss, R., The Gift Relationship (1970; reissued by LSE Books, 1997). Checked 28 August 2026. The 50-kronor payment is described in the source as roughly seven US dollars at the time of the experiment.