Essays on Gifts of Blood, Money and Time

Title: Essays on Gifts of Blood, Money and Time
Authors: Owusu, Rebekah
Date: 2016
Abstract: This thesis investigates the voluntary provision of public goods in three distinct contexts. Specifically, it studies gifts of blood, money and time. While the first essay undertakes to investigate the behaviour of blood donors from a theoretical perspective, the second and third chapter use the tools of empirical applied microeconomics to investigate strategic philanthropy (Chapter 2) and the impact of mandatory volunteering on income (Chapter 3). In Chapter One I use the tools of non-cooperative game theory to study blood donor behaviour. I construct a model in which the decision to donate blood is driven by the need for consumers to obtain insurance against needing a blood transfusion, and in which access to the resources of the blood bank are allocated as under a first-come, first-served policy. I also study the effect of screening policies on the available blood supply, and identify policy instruments which may be effective in increasing the supply of blood. Strikingly, although blood banks typically direct greater effort to persuading universal donors (type O negative) to donate blood, I show that the efficient allocation is for individuals of each blood type to donate the same amount of blood. However, at the Nash equilibrium, the individuals who are the most likely to donate blood are universal recipients, and those who are the least likely are universal donors -- a prediction that is consistent with observed donation frequency by blood type. The model also predicts that if there is an increase in the probability of needing blood, this will have no impact on donations of those individuals who are faced with a positive probability of not getting blood. I also show that in an economy with "good" blood and "bad" blood donors, if the total amount of bad blood is more than the total amount of good blood, bad blood crowds out good blood. The second chapter is concerned with giving practices that practitioners refer to as strategic philanthropy. Anecdotal evidence that suggests that charitable givers -- particularly those with the financial means and inclination to make substantial donations - are increasingly strategic in their philanthropic behaviour. However, there is no existing literature which has investigated whether or not so-called strategic givers are in fact determining donations differently from other donors, or whether in fact it is true that strategic behaviour is increasingly prevalent. A first challenge is to discern what specifically might constitute strategic giving, and I propose that strategic philanthropists are individuals who (i) plan their giving; (ii) give most of their philanthropic gifts to a small number of charities, and (iii) get involved in the organisations to which they make gifts. Different estimation methods are applied, and the results show that some charitable givers are strategic in their philanthropic giving, and that the propensity to be strategic is highly and positively correlated with the level of education. My results also show that giving is strategic only when donations are made to secular organisations but not to religious organisations. My results also indicate that strategic behaviour has a substantial positive impact on donations to secular organisations. The last chapter examines the link between volunteering and income, focussing particularly on the impact of mandatory volunteering in high school. I use data from the 2013 Giving, Volunteering and Participation component of the General Social Survy (GSS GVP) to update previous research on the labour market returns to volunteering and find evidence, consistent with previous findings that indivuals who choose to volunteer earn higher incomes. In contrast, when volunteering is mandated for high school students, the impact on income depends on the type of policy and on the time horizon. When the policy requires students to perform free community service, it has no impact on income in the short run but generates a positive return in the long run. In contrast, when the policy requires students to acquire either paid or unpaid work experience, it leads to lower incomes in the short run but has a positive impact in the long run. There are three channels by which it has been suggested that volunteering leads to high labor market returns: human capital accumulation, strengthening of social networks, and signalling high productivity. The results suggest that when volunteering activities are mandated, this breaks the signal to potential employers. However, mandatory volunteering still leads to human capital accumulation and strengthens social networks, and consequently ultimately generates a positive return. Overall, requiring high school students to undertake free community service yields a better labour market outcome in the short run than the mandated work experience policy.
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