Eureka! Institutional Repository

Crowdfunding is an expanding form of alternative financing that is gaining traction in the health sector. This article presents a typology for crowdfunded health projects and are view of the main economic benefits and risks of crowdfunding in the health market. In this master’s thesis, we used evidence from a literature review, complimented by expert interviews, to extend the fundamental principles and established theories of crowdfunding to a health market context. Crowdfunded health projects can be classified into four types according to the venture’s purpose and funding method. These are projects covering health expenses, fundraising health initiatives, supporting health research, or financing commercial health innovation. Crowdfunding could economically benefit the health sector by expanding market participation, drawing money and awareness to neglected health issues, improving access to funding, and fostering project accountability and social engagement. However, the economic risks of health-related crowdfunding include inefficient priority setting, heightened financial risk, inconsistent regulatory policies, intellectual property rights concerns, and fraud. Theorized crowdfunding behaviors such as signaling and herding can be observed in the market for health-related crowdfunding. Broader threats of market failure stemming from adverse selection and moral hazard also apply. Many of the discussed economic benefits and risks of crowdfunding health campaigns are shared more broadly with those of crowdfunding projects in other sectors. Where crowdfunding health care appears to diverge from theory is the negative externality inefficient priority setting may have towards achieving broader public health goals. Therefore, the market for crowdfunding health care must be economically stable, as well as designed to optimally and equitably 24 improve public health. In this master’s thesis, a survey was conducted using a questionnaire to identify a new method of financing in the health sector, that of crowdfunding, and the reaction of the participants in research to support economically neglected people in need of medical treatment.