I figured it was only a matter of time until someone got to this point, since you lovely people really seem enamored by the organ market conversation. From my Facebook page:
David Plumb: how much for one of your kidneys?
At first I wanted to give a flippant answer that this question was irrelevant since the existence of a market for kidneys did not imply that I would be forced to participate in said market. (Unless of course you believe the stories about waking up in a bathtub full of ice missing a kidney…though I would argue that is a separate market.) But once I thought a little it became an interesting question to me, and one that I am not sure I have a good answer for. My attempt: (I originally meant to reply on Facebook, but the character limit on comments was soon exceeded. So much for being concise.)
You know, for someone who studies money and things related to money, I am remarkably unmotivated by it. I suppose that’s why I am an academic economist and not an investment banker. I am generally happy if I can pay my mortgage and buy cute shoes and nice dinners.
As such, I am not sure as to the answer to your question. I am pretty sure that if someone I really cared about needed a kidney I would give one regardless of the price, but I am not sure that I would sell one at all for use by a random stranger regardless of the price. I have no idea whether I am representative in this way- if I am, then paying for organs is kind of a non-starter. Ideally, there would be some research conducted on what the supply curve for organs actually looks like, since that information would help to inform whether allowing a price mechanism would actually be worth it. (In other words, if it took too absurd an amount of money to move the needle on organ supply, then why bother with controversial legislation?)
This question can be illustrated with a couple of diagrams:
I drew both diagrams so that the current supply of kidneys (the level where price is zero) is the same. Demand for kidneys is also the same in both diagrams. The only difference between the two is how responsive the supply of kidneys is to price. Two important differences arise from this price sensitivity:
- When kidney suppliers aren’t very sensitive to price (i.e. another dollar isn’t a very strong motivating factor – case 1), the price for kidneys ends up being higher than if kidney suppliers were more motivated by the almighty dollar (case 2).
- When kidney suppliers aren’t very sensitive to price (case 1), the increase from the status quo in how many transplants are done is small compared to the case where suppliers are sensitive to price (case 2).
It’s pretty clear then that it’s important to know whether the market looks like case 1 or case 2. In case 1, you could end up paying $1 million each for an increase of 5 kidneys, in which case a smart policy maker might decide that having the healthcare system pay the market price for kidneys is not such a hot plan. If, on the other hand, a more modest sum could markedly increase the number of available transplants, then allowing a kidney market could be a socially promising strategy.
As if the situation wasn’t complicated enough, I would like to point out that the research on supplier behavior is not at all straightforward. People are generally very bad at answering hypothetical questions about willingness-to-pay and willingness-to-sell. (Notice above that even I admitted that I had no idea what dollar figure I would place on one of my kidneys.) Furthermore, people tend to be sensitive to the way questions are framed, so any survey design would have to be very well thought out. But before we throw up our hands and admit defeat, consider that if this research could at least provide a ballpark figure of what price and quantity is reasonable then it could be pretty valuable in making the case for (or against) a change in policy.