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Kidney Markets?

Sep 8, 2010 • Demand, Supply, and Markets, Regulation, Thinking Economically • 144 Views    3 Comments

What should we be able to buy and sell? Alcohol? Land? People? Body Parts?

In a Teaching Company lecture on organ transplants, Wake Forest economist Robert Whaples says that the answers depend on the market’s boundaries. And, he soon adds, those boundaries change. Prohibition, for example, transformed the price, demand, and supply of alcohol between 1918 and 1933.

Dr. Whaples asks whether a similar change should happen for organ transplants. Describing current shortages, he says that the demand side of the market, with insurance covering the expense, is considerable. By contrast, on the supply side, with altruism the key incentive since selling body parts is illegal, the hearts, lungs, kidneys, intestines that certain people need, are insufficiently available.

That returns us to the market. Whether looking at human transplants or the viability of the housing market, we seem to keep on returning to how much we want to permit unfettered supply and demand.

Should we be able to buy and sell kidneys if it will diminish massive shortages?

The Economic Lesson

When demand and supply interact, they allocate resources. If they are interacting successfully, then resources are allocated efficiently. Sometimes, though, markets fail. For example, when a factory pollutes, we can say we have market failure because the cost of pollution has been ignored by the price. We also have market failure when government partially affects the market’s boundaries through subsidized housing or a minimum wage. Finally, as with organ transplants, those boundaries can completely eliminate the market.

 

 

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  • CarolineGiroux

    It is definitely necessary to consider the questions that Stefanie has posed. I agree that a comfortable median would be the “no-give, no-take” policy. As we learned today, economists believe in incentives and this would be a great incentive to donate organs.

    Caroline Giroux

  • birdf11

    Response to Stefanie’s Post:

    Stefanie brings up many valid questions that the government would need to take into consideration when discussing this issue. If organs begin to cost recipients, Americans will begin to travel to other countries and use the black market to avoid the cost that the government would charge. The national deficit would continue to increase because the government would end up paying for most organs and transplants.

    Frances Bird

  • zavodnys11

    It’s no doubt that opening a legal kidney market would shorten the transplant list, but at what cost? Who would pay for these kidneys, the government or the recipient, and what happens when neither can afford it? Does the recipient receive a free kidney if the first one is bad? Do you get a discount for a kidney that had a tumor removed from it? Should those kidneys be sold at all? The prospect of a monetary reward would raise the motivation to donate, but it would also bring about a new wave of crime in order to sell organs for a profit. The black market would become a legal market. Organ donation could become a last resort to those with no luck and empty bank accounts. However, with a greater supply, organs of a higher quality would be available, and those in desperate need would not have to rely on risky organs. I do not think that we should be able to buy and sell organs, but I like the no-give, no-take policy that Israel is using. In this system, people who are not organ donors are put at the bottom of the waiting list if they ever need an organ. This feeds off the basic golden rule that “you should treat others how you would like to be treated.” If you wouldn’t be willing to donate, why should you be able to receive? This is a suitable middle road between the moral opposition to selling organs and the moral obligation to help those in need.

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