Investigation of the free rider problem in the context of public goods

Public goods are a market failure that causes the free-rider problem. This thesis aims to examine public goods through the free-rider problem and to analyze the factors that affect individuals' voluntary contributions and cooperation decisions in the provision of public goods. For this purpose, blood donation system, funded through voluntary and individual contributions, has been recognized as a public good, and individuals who are physically capable of donating blood, but choose not to do so, and still expect to receive blood when needed, are considered as free riders. Data for this research was collected through questionnaires from a sample of 600 individuals residing in the Erzurum province. Data was analyzed with binary and multiple logistic regression models, which are discrete preference models. The binary logistic regression results determine that women have a higher tendency to be free riders as compared to men, as the income level increases, the probability of being a free rider increases, noncontributing to collective actions increases the probability of being free riders, and an individual's trust in their society increases, the probability of being a free rider decreases. The results also support the group size hypothesis. According to the results of multiple logistic regression, factors such as neighborhood, gender, marital status, age, income variables, the level of individual's trust in their society, encouragement and coercion, contributing to collective actions, allowing organ donation after death, assurance of obtainable blood, and history of prior donation are explaining the reasons for being a free rider.