Finding the right incentives for blood donation.

People with healthy blood to spare vastly exceed those who need transfusions. So you'd think that we could count on blood if we find ourselves faced with major surgery, trauma, chemotherapy, or other misfortunes. But the preponderance of blood shortage stories in the local news suggests otherwise.

According to the American Red Cross, nearly 5 million people receive blood transfusions each year. A blood shortage occurs when a region's blood stores slip below the level necessary to facilitate transfusions for a three-day period. Why is it so difficult to maintain an adequate blood supply?

Locals often respond to shortages with an outpouring of donations, but the near exclusive reliance on volunteer donations is probably a big reason that blood shortages are so common in the first place. Only about 5 percent of eligible Americans volunteer to give blood. So what's the best way to incite the other 95 percent to get in on the action?

Money would be an obvious method. But it remains illegal to pay people for whole blood (as opposed to blood plasma) in much of the Western world. If relaxing such prohibitions might prevent blood crises, why not pay for blood?

Some donors and would-be donors may find the notion of cash for blood offensive. Offering money for blood would tarnish the sense of civic duty that motivates many people to donate blood in the first place. If cash payments turn off enough blood donors, the net return from monetizing the blood trade could be weaker than expected.

But there may be less blatantly distasteful incentives. The work of Nicola Lacetera and Mario Macis, economists from Case Western Reserve University and the University of Michigan, suggests that noncash incentives have the potential to increase the blood supply without ruining the sense of altruism that currently motivates donations.