Economists Do It With Models

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Follow Up: Add Kidneys To The Apples And Livers…

July 14th, 2009 · 11 Comments
Follow Ups · Markets · Policy

Since I posted before about Steve Jobs and his iLiver 2.0 or whatever

Here is a great article about organ donation and the market for kidneys- it’s both carefully thought out and well-written. The downside of the article having those qualities is that I don’t have a whole lot to add. But obviously I will try anyway…

Here’s what confuses me a little, not so much about the article as about the situation in general. The organ donation people seem to be singing two different tunes here- on one hand, they are saying how valuable and safe kidney donation is, highlighting new technologies to make the procedure less invasive and such. But then some come out against paying people for kidneys, since the suppliers are supposedly going to be blinded by the dollar signs and not realize how much of a big deal the procedure is. Personally, I interpret something as more of a big deal if I get compensated highly for it than if I am expected to do it for free. For example, I’ve never looked into egg donation, but I think it’s pretty safe for me to infer that egg donation is a bigger deal than sperm donation based on the relative levels of compensation. (Also, despite my D in freshman bio, I’m not a complete idiot. Nonetheless, you get my point.)

In reading these sorts of articles, I keep getting reminded of South Carolina’s proposal to allow prisoners to donate organs in exchange for shorter sentences. (I am not surprised that this bill did not pass, since a shorter prison sentence is pretty clearly valuable consideration, which puts the bill at odds with federal law.) You can find one of the articles on the matter here. Again, I am a bit bemused that the same people that espouse the upside of organ donation then turn around and equate it with selling one’s soul to the devil or something. For example, from the article:

“A state Senate panel on Thursday endorsed creating an organ-and-tissue donation program for inmates. That’s not really an issue.”


“There is always the risk and possibility of coercion, particularly if there is a reward such as 180 days off a sentence.”

Some commentary: First off, I looked up the word coercion here, just to be sure. Yep, coercion is forcing someone to do something. Last time I checked, it was possible to try to force someone to do something regardless of whether a reward is in place. It’s like when my students equate high prices to extortion- last time I checked, no one was holding a gun to your head and forcing you to buy the gass-guzzling SUV. (It’s sometimes interesting to see what types of consumption people consider to be mandatory. And by interesting I mean sad.)

I particularly liked the following excerpt:

‘It also might not be the best thing for the organ recipients either says Dr. Jonathan Groner Associate Professor of Surgery at The Ohio State University College of Medicine and Public Health. He explains the prison population has a much higher incidence of HIV, AIDS, Hepatitis, and even tuberculosis than the general population. “Not all of these infectious agents can be tested with 100 percent accuracy.” Groner says. ” I do not think that I would want a loved one to receive a “prison kidney.”‘

First, score one for statistical discrimination. Second, this doctor doesn’t seem to understand the choice to be made in a lot of cases- it’s not between “prison kidney” and “white-collar educated professional” kidney, it’s between “prison kidney” and “4 hours of dialysis 3 times a week.” Put that way, I’m not sure I would want to be one of his loved ones. Furthermore, I’m sure if the loved one wanted to pass up the “prison kidney”, there would be somebody else happy to take it. Third, why is it even relevant whether he would want a loved one to receive such a kidney? Last time I checked, that was the loved one’s choice…

Don’t get me wrong- I don’t really think that paying for organs is a perfect solution. I have written enough about the crowding out of the moral incentive that I am perfectly well aware of the fact that it could turn off some donors. I also realize that people aren’t always time-consistent in their preferences and some may regret their donation decisions. (Though isn’t this the case even when there is no money involved? At least with this plan donors can drown their sorrows in a pile of cash.) However, these factors don’t tell the the whole story and must be weighed against the benefits to those people who could be living normal lives as a result of the donations. Overall, a market for kidneys is most likely a big improvement over the status quo and could go a long way to solving a very important problem.

Tags: Follow Ups · Markets · Policy

11 responses so far ↓

  • 1 Alan // Jul 14, 2009 at 2:26 pm

    My question about the actual donation procedure, when you agree to donate an organ who pays for the procedure and your hospital care after the fact?

    I can see paying for care as a way to ensure that the moral incentive won’t be crowded out, and to help mitigate the costs of donation, though you will still be donating time and some suffering.

  • 2 econgirl // Jul 14, 2009 at 4:02 pm

    Wow. So, if you weren’t convinced that understanding economics helps you to generally suck less at life, consider the following the following strategy posed by another economist:

    “Since kidneys tend to fail as a pair, a calculating person might sell their young healthy kidney so that they could save up to purchase its replacement later on. That’s the kind of person I want to hang out with.”

    Wow. Just wow.

  • 3 J Frank // Jul 14, 2009 at 4:58 pm

    The problem is that the typical person who might consider donating a kidney does not know the true cost of losing one without consulting an “expert”–quite likely a doctor facilitating the transaction. Yes in theory there are ways around that, but I suspect that realistically it would be hard to create a fully informed kidney donation market (however, on the other hand, it might be worth letting people do it anyway in a second-best–or more likely fifth-best sort of solution) .

  • 4 Scott Ritchie // Jul 14, 2009 at 6:21 pm

    How could you write a second article on organ donation and still overlook the effect on donation rates from changing the form at the DMV?

  • 5 Justin Ross // Jul 14, 2009 at 9:16 pm

    Alan: Who writes the check to pay for the procedure and post-op care would be irrelevant, as the market price of the kidney would adjust to reflect those costs. This phenomenon is known as economic incidence (as opposed to statutory incidence) and is very commonly applied in the study of taxation.

    J Frank: It seems unlikely a person would not get around to meeting a doctor in the process. Its hard to imagine someone willing to buy a kidney from someone who had not consulted a doctor (what would that imply about their kidney quality?). My guess is that on average people would guess the cost pretty adequately, but if there is a bias it would probably be towards overestimating the cost. Wouldn’t you error on the safe side?

    Best to all,

  • 6 econgirl // Jul 14, 2009 at 11:54 pm

    Justin posts the following, nicely entitled “Economists Doing It With Models: A Facebook Three-Way.” I wonder who the model is in this scenario? 🙂

  • 7 econgirl // Jul 14, 2009 at 11:55 pm

    @ Scott: I swear I’m getting around to it. But you are very right.

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