May 11, 2014

Economics of Blood

From the article "The Market for Blood" by Robert Slonim, Carmen Wang, and Ellen Garbarino. 

With no market price for whole blood donations and with limited storage length for whole blood, coordinating demand and volunteer supply has been subject to episodes of both excess supply and shortages. Supply spikes often occur after disasters, due to suppliers’ altruistic responses and inadequate market signals that would have revealed little or no shift in demand. Spikes in donations, combined with six week shelf life for whole blood, along with technical constraints and collection agency policies, have led to destroying blood supply after national disasters. (p. 189-190)
It is also common for volunteer supply to fall below demand, especially during the winter (when suppliers are less able to donate due to higher rates of colds and the flflu) and holiday periods (when people travel). (p. 190).
In the current volunteer blood donation context, the absence of a market price means that donors may donate when blood is not needed and not donate when it is needed. (p. 191).

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