Only Musical Organs Belong on eBay

I had my students present and discuss a study of the market for organ donations. The study points out that prices are not used to elicit supply of live organs or to ration demand, and that the shortage (waiting list) of kidneys and livers has been increasing.

The authors propose using prices to reduce the shortage of both live donations and cadaver organs.

If this were a market for beans, or water, or even housing — where the price is kept low because of government restrictions — I would agree completely. But in this market, it’s hard to agree entirely.

Perhaps on the supply side, why shouldn’t someone donate a kidney, perhaps earn $15,000, if s/he wishes to? So long as the donation locations are regulated, people should be able to offer informed consent in the face of the increasingly well-known (and decreasing) risks of donating.

On the demand side, however, allowing people to bid for organs seems repugnant to me. (I do not want livers — except perhaps foie gras — on eBay!) Ethically, it seems wrong to let richer people move to the front of queues for scarce organs (to let the market implicitly value their lives more than those of poorer people).

So here’s a case where even a free-market economist might not welcome the full working of the market and might instead prefer governmental, or quasi-governmental rationing of a scarce resource. At least in part, equity would trump efficiency.