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Blood Money: Selling Plasma to Avoid High-Interest Loans

Author

Listed:
  • John M Dooley
  • Emily A Gallagher

Abstract

Little is known about the motivations and outcomes of sellers in remunerated markets for human materials. We exploit dramatic growth in the U.S. blood plasma industry to shed light on the sellers of plasma. Sellers tend to be young and liquidity-constrained with low incomes and limited access to traditional credit. Plasma centers absorb demand for nontraditional credit. After a plasma center opens nearby, demand for payday loans falls by over 13% among young borrowers. Meanwhile, foot traffic increases by over 4% at nearby stores, suggesting that constrained households use plasma markets to smooth consumption without appealing to high-cost debt.

Suggested Citation

  • John M Dooley & Emily A Gallagher, 2024. "Blood Money: Selling Plasma to Avoid High-Interest Loans," The Review of Financial Studies, Society for Financial Studies, vol. 37(9), pages 2779-2816.
  • Handle: RePEc:oup:rfinst:v:37:y:2024:i:9:p:2779-2816.
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    File URL: http://hdl.handle.net/10.1093/rfs/hhae018
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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