Thesis Thursday: Sara Machado

On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Sara Machado who graduated with a PhD from Boston University. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Title
Essays on the economics of blood donations
Supervisors
Daniele Paserman, Johannes Schmieder, Albert Ma
Repository link
https://open.bu.edu/pdfpreview/bitstream/handle/2144/19216/Machado_bu_0017E_12059.pdf

What makes blood donation an interesting context for economic research?

I’m generally interested in markets in which there is no price mechanism to help supply and demand meet. There are several examples of such markets in the health field, such as organ, bone marrow, and blood donations. In general, all altruistic markets share this feature. I define altruistic markets as markets with a volunteer supply and no market price, therefore mainly driven by social preferences.

In a way, the absence of a price leads to a very traditional coordination problem. However, it requires not-so-traditional solutions, such as market design, registries, and different types of incentives, due to many historical, political, and ethical constraints (which leads us to the concept of repugnant markets, by Roth (2007)). The specific constraints for blood donations are outlined in Slonim et al’s The Market for Blood, which also outlines the main experimental findings regarding the effects of incentives on blood donations. The blood donations market is the perfect setup to study altruistic markets, not only because of its volunteer supply but also due to the fact that it is a potentially repeated behaviour. Moreover, the donation is not to a specific patient, but to the supply of blood in general. Social preferences, as well as risk and time preferences, play a key role in minimizing market imbalances.

How did you come to identify the specific research questions for your PhD?

I was quite fortunate, due to an unfortunate situation… There was a notorious blood shortage, in Portugal, when I started thinking about possible topics for my dissertation. It got a lot of media coverage, possibly due to political factors, since the shortage happened shortly after a change in the incentives for blood donors. My first question, which eventually became the main chapter of my dissertation, was whether there was a causal relationship.

The second chapter is the outcome of spending many hours cleaning the data, to tell you the truth. I started to realize that there are many other factors determining blood donation behaviour. All non-monetary aspects of the donation process are very relevant in determining future donation behaviour (also highlighted by Slonim et al (2014) and Lacetera et al (2010)). I show that time can be a far more important currency than other forms of incentives.

Finally, I realized how important it would be for me to be able to measure social preferences to continue my research on altruistic markets and joined a team lead by Matteo Galizzi, who is working on measuring preferences of a representative sample of the UK population. My third chapter is the first installment of our work in this domain.

Your research looked at people’s behaviour. How does it relate to the growing recognition that people make ‘irrational’ choices?

The more I look into this, the more I think that we have to be careful about a generalization of irrationality. There is nothing “irrational” in blood donors’ behaviour, for the most part. So far, I have only resorted to very neoclassical models to explain donors’ behaviour – and it worked just fine.

The way I see it, there are two separate aspects to take into account. First, the market response. It is worrisome if we find market responses that are only possible if the majority of agents are making “irrational choices”. Those markets need tailored interventions to inform the decision-making process.

The second aspect zooms in into individual decision-making. In this case, it is important to determine whether there are psychological biases leading to suboptimal, or irrational, choices.

One might argue that a blood donation due to an emotional response to some stimuli is “irrational”. I strongly disagree with that categorization. For example, there is nothing suboptimal in donating blood as a sign of gratitude to previous blood donors.

The main message is that it is important to identify behavioural biases that lead to inefficient market outcomes, but “irrational choices” is too wide an umbrella term and should be used with caution.

Are any of your key findings generalisable to settings other than blood donation?

I think two key findings are quite general. The first one is the fact that it is possible to design incentive schemes that bypass the question of the crowding out of intrinsic motivation. This is a fairly general issue, that ranges from motivating employees at the workplace in general to the design of incentive schemes for physicians, to the elicitation of charitable giving, just to name a few examples. As long as it is a repeated behaviour, the result holds. This highlights a different aspect, the importance of placing lab and isolated field experimental evidence into perspective when informing policy making. There is extensive experimental literature on the crowding out of intrinsic motivation, but very little has been done at the market level and with a longitudinal component. This has limited the ability to take into account the advantages of focusing on repeated blood donation, on the one hand, and of incorporating demand side responses, on the other hand (namely by increasing the number of blood drives).

The second key aspect is the advantage of using time as the main opportunity cost faced by a volunteer supply, in the context of prosocial behaviour.

Based on your research, what might an optimal blood donation policy look like?

I believe there are two key ingredients in the design of the optimal blood donation policy: 1) promoting blood donation as a repeated behaviour; and 2) increasing the responsiveness of blood donation services in order to minimize demand and supply imbalances.

The first aspect can be addressed by designing incentive schemes targeted at repeated donors, with no rewards for non-regular behaviour. The second would greatly benefit from the existence of a blood donor registry, similar to the one already in place for bone marrow donation. This registry would allow for regular blood donors to be called to donate when their blood is needed, minimizing waste in the system. The organization of blood drives would also be more efficient if such a system was in place.

These two components contribute to the development of the blood donor identity, which guarantees a steady supply of blood, whenever necessary.

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Meeting round-up: International Society for Economics and Social Sciences of Animal Health inaugural meeting

Last week I attended a conference that was very different to any that I’ve attended before. It was the first meeting of a new society – the International Society for Economics and Social Sciences of Animal Health (ISESSAH). I and Prof Marilyn James wanted to get involved with ISESSAH from the get-go in order to start identifying opportunities for collaboration with animal health researchers. In particular, we see the potential for the application of cost-effectiveness analysis methods in the veterinary context. The proceedings of the conference suggested that this is not something that is currently being done.

So off to the Highlands we headed, happily arriving in Aviemore while the town was improbably celebrating being the hottest place in the UK. Aside from my lack of sunglasses and excess of thick jumpers, I did have some intellectual concerns. I was a little worried that there would be few points of commonality between me and the other delegates. A hands-in-the-air poll during the first keynote speech by Tim Carpenter suggested that a minority of people in the room identified primarily as economists. Most people identified as “animal health specialists” and I suspect that most of these people were principally interested in epidemiological questions relating to livestock animals.

Happily, my fears were not realised. The first talk, by Erwin Wauters, discussed the challenge of framing research questions and in particular identifying the context of the decision. This is something we figured out a while ago in health economics and now have the luxury of bickering about health service and societal perspectives for our analyses. But the overlap was striking, as Erwin discussed the proliferation of ‘cost of disease’ studies with limited interpretability. I wondered (aloud, as a question) what the unique challenges might be in defining the context (what we would call perspective) in animal health as opposed to human health. This turned out to be prudent, as numerous delegates approached me over the proceeding 48 hours to tell me what they thought the answer was (euthanasia/culling, market structure, data availability, amongst others).

The whole conference consisted of methods that were familiar. Don’t get me wrong, most (though not all) of the subject matter was alien to me. But that’s par for the course in applied health economics anyway. Many of the studies – and I mean this to be in no way a criticism of those presenting – would strike health economists as analytically rudimentary. There were lots of cost-benefit analyses, plenty of epidemiological models with costs attached (does that make it an economic model?) and a handful of econometric analyses. Some studies (aside from my own poster) were very familiar and referred explicitly to ideas from the health economics field. In particular, Paul Torgerson and colleagues presented a framework that incorporates animal disease burden with DALY estimation. A French group mused on the role of QALYs.

Something consistent across many of the empirical studies was that the decision problems were ill-defined. In the economic evaluation of (human) heath care, we attribute major importance to the adequate definition of the decision problem and the identification and definition of all relevant options for the decision maker. It is perhaps for this reason that – as Jonathan Rushton argued – economics in the animal health context is used more for advocacy than to achieve optimality. Or maybe the causality goes the other way.

There were also lots of sociological and other sub-disciplines of social science represented, with fertile opportunities for interdisciplinary research. I didn’t like the distinction that was made throughout the conference between economics and social science. Economics is a social science. It isn’t bigger or better or distinct. Economists don’t need any encouragement in distancing themselves from sociologists and other social scientists. All of the research (with no exaggeration, though to varying extents) could benefit from health economists’ input. Thanks to our subfield’s softer edges, health economists make for good social science all-rounders. But then I would say that.

There was a discussion of how the conference will operate in the future. As someone who worships at the church of HESG, my instinct was to advise copying it. But that wouldn’t be right in this case (except perhaps for the levy of a nominal membership fee). ISESSAH will need to focus on interdisciplinarity. Delegates had a palpable taste and even excitement for interdisciplinary research. My (previously unknown) Nottingham colleague Marnie Brennan described how she thought the society would do well to adopt a policy of infiltration, to force interdisciplinary engagement, by creating a presence for itself at other conferences. The 2017 meeting took place alongside that of the Society for Veterinary Epidemiology and Preventive Medicine (SVEPM). Hopefully, in the future, we’ll see collaboration with human health research and economics societies and, who knows, maybe even the health economists.

How to cite The Academic Health Economists’ Blog

Occasionally we get emails from people who would like to cite our blog posts. Usually, these requests are framed as ‘is this going to be published in a journal?’. It’s no surprise that people are more comfortable citing the traditional academic literature. But researchers are increasingly citing blog posts. Indeed, some of our blog posts have been cited in published academic literature.

There are plenty of guides out there for citing blog posts. You may like to refer to them for specific formatting styles. Cite This For Me is a useful tool for generating references in a variety of styles. Here I’d like to provide a few specific recommendations for citing posts from this blog.

1. Cite the author

Our blog posts are written by lots of different authors, not by ‘the blog’. The author’s name – assuming they have not claimed anonymity – will appear at the top of the blog post. Let’s take a recent example. To start with, your citation should look something like:

Watson, S. (2017). Variations in NHS admissions at a glance. The Academic Health Economists’ Blog. Available at: https://aheblog.com/2017/01/25/variations-in-nhs-admissions-at-a-glance/ [Accessed 8 Mar. 2017].

2. Use our ISSN

As of this week, the blog now has its own International Standard Serial Number (ISSN). This number uniquely identifies and distinguishes the blog. Our ISSN is 2514-3441. You can find it at the bottom of the sidebar and on our About page. So your citation could become:

Watson, S. (2017). Variations in NHS admissions at a glance. The Academic Health Economists’ Blog (ISSN 2514-3441). Available at: https://aheblog.com/2017/01/25/variations-in-nhs-admissions-at-a-glance/ [Accessed 8 Mar. 2017].

3. Use WebCite

Unlike journal articles, websites can change. One of our authors could (in principle) completely change the content of their blog post after publishing it. More importantly, it is possible that our URLs may change in the future. If this were to happen, the link in the reference above would become redundant and the citation would not be useful to readers. What needs to be cited, therefore, is the blog post at the time at which you accessed it. Enter WebCite. WebCite is a service that archives a webpage and provides a permanent link for citation. This can be achieved by completing an archiving form. Our citation becomes:

Watson, S. (2017). Variations in NHS admissions at a glance. The Academic Health Economists’ Blog (ISSN 2514-3441). Available at: https://aheblog.com/2017/01/25/variations-in-nhs-admissions-at-a-glance/ [Accessed 8 Mar. 2017]. (Archived by WebCite® at http://www.webcitation.org/6ooALaGyF)

4. Check the comments

Finally, authors may choose to subsequently publish their blog post elsewhere in another format or to upload it to a service such as figshare in order to obtain a DOI. Check the comments below a blog post to see if this is the case as there may be an alternative source that you might prefer to cite.

But as ever, if you’re struggling, get in touch.

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