Thursday, July 20, 2006

Donor Relations

The first rule of economics is that Incentives Matter. These incentives can be both monetary and non-monetary; economics recognizes that people are utility-maximizers, not dollar-maximizers. It seems intuitively obvious that both types of incentives affect how real people act.

One argument in favor of allowing a "market for organs" is that this will create greater incentives for people to donate. The donors face a very real non-monetary cost -- the fear of surgery, pain of recovery, sickness, complications in surgery, etc. Science Blog reports that the monetary cost of donating a kidney can be substantial as well. They discuss a doctor's literature survey on the cost of donating a kidney.

Some of the results are as follows:

1. One US study finds that the average cost to a donor is $837, with values as low as zero and as high as $28,900.

2. Time lost from work is substantial -- average loss of $3,386 in the United Kingdom and $682 in the Netherlands.

3. Physical Limitations led to 3% of donors in one study either losing or resigning their job.

A common fear about a market for organs is that, at a positive price, the rich will live and the poor die. Regardless of the merits of this argument, one must recognize that price also plays a role in increasing the supply of a good. Incentives matter. Relying solely on the altruism of others who face a significant monetary cost (not to mention non-monetary cost) seems to require the faith that people are Angels.

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