Paying for Altruism: The Case of Organ Donation Revisited

27 Pages Posted: 23 Sep 2014 Last revised: 6 Aug 2015

See all articles by Firat Bilgel

Firat Bilgel

MEF University

Brian D. Galle

Georgetown University Law Center

Date Written: September 22, 2014

Abstract

Although many commentators have called for increased efforts to incentivize organ donations, theorists and some evidence suggest these efforts will be ineffective or even could perversely crowd out altruistic efforts. Prior papers examining the impact of tax incentives for donations generally report zero or negative coefficients. We argue these studies incorrectly define their tax variables, and rely on difference-in-differences methods despite likely failures of the requisite parallel trends assumption. We therefore aim to identify the causal effect of tax incentive legislation to serve as an organ donor on living related and unrelated kidney donation rates in the U.S states using more precise tax data and allowing for heterogenous and time-variant causal effects. Employing a synthetic control method, we find that the passage of tax incentive legislation increased living unrelated kidney donation rates by about 52 percent in New York relative to a comparable synthetic New York in the absence of legislation. We show that this causal effect is robust to the exclusion of any particular state as well as to the use of a very small number of comparison states.

Keywords: organ donation, living kidney donation, altruism, tax incentives, synthetic controls, crowding out

JEL Classification: I18; K32; C15

Suggested Citation

Bilgel, Firat and Galle, Brian D., Paying for Altruism: The Case of Organ Donation Revisited (September 22, 2014). Journal of Health Economics, Forthcoming, Boston College Law School Legal Studies Research Paper No. 337, Available at SSRN: https://ssrn.com/abstract=2499686 or http://dx.doi.org/10.2139/ssrn.2499686

Firat Bilgel

MEF University ( email )

Ayaza─ča Cad. No.4 34396
Maslak - Sariyer
Istanbul
Turkey

Brian D. Galle (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

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