Economics is everywhere!

A new way to worry about cost benefit analysis.
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Can I have a kidney for $20,000 please?

U.S. federal law has long banned any compensation for human organs, but with the demand for kidney transplants far outstripping the number of donors, some economists are urging the adoption of market-based innovations to increase supply.

One of these is the University of Buffalo's Julio Elias, who argues that, distasteful or not, monetary incentives are the most efficient way to boost the number of organs available for transplant, and should be introduced. On the other side, Harvard University's Alvin Roth argues that cultural mores -- repugnance -- preclude buying and selling of organs. Instead, he says, alternative arrangements, such as so-called organ exchanges, might be a better solution.

Julio Elias writes: The only feasible way to eliminate the large queues in the market for kidney transplants is by significantly increasing the supply of kidneys. The introduction of monetary incentives could increase the supply of organs sufficiently to eliminate the large queues, and it would do so without increasing the total cost of kidney transplant surgery by a large percent, as Gary Becker and I show in a paper on the potential of markets for organs.
Even though the benefits of eliminating the organ shortage are significant, many people have opposed proposals to pay for organs, a practice prohibited under present law in almost every country.
Some critics argue that payment is "immoral" because it involves the "commodification" of body parts, or that the poor will be "coerced." Others are opposed because they simply do not like the idea of the existence of a market for organs. However, conclusions about the morality of using prices to encourage supply or ration demand have changed in the past when they were shown to be effective. One example is a carbon tax to cut pollution; another is the use of willingness to pay to reduce the risk of death to measure the (statistical) value of life. Attitudes about using prices to help eliminate the shortage of organs would also change, I am confident, when it is shown how efficiently prices would solve this problem.

Alvin Roth writes: Selling organs is illegal in most countries. Legalizing kidney sales faces substantial, perhaps insuperable obstacles. Just as you can't sell yourself into indentured servitude anymore, some transactions are illegal because enough people find them repugnant. But many people are in urgent need of kidney transplants, so it's helpful to think about steps to relieve the shortage now.

Kidneys for transplantation come from either deceased or living donors (a healthy person has two kidneys and can remain healthy with one). Some ways to increase the number of deceased donor kidneys include changing how donations are solicited (e.g. introducing opt-out rather than opt-in donor decisions), changing when kidneys are "harvested" (after heart-death, as well as brain-death), and changing which organs are selected (e.g. older patients might profit from organs from donors older than are now considered).
There would be more live-donor transplants if everyone who wanted to donate a kidney to someone could do so, but a healthy person's kidney is often incompatible with his or her intended donor. So, one way economists have helped is in helping organize kidney exchanges, which allow incompatible patient-donor pairs to exchange with other such pairs.


What do you think?