>This, of course, increases transaction cost, but certainly not enough to >exceed the gains from trade. But I still believe you would have an adverse >selection problem--those from whom you would least like to have a donated >organ would be the most likely to sell theirs. Religious groups, of all >sectors, would seem to have the greatest restrictions against selling their >organs. I am not convinced, however, that any of these would thwart a viable >market--insurance companies would certainly find it in their interest to >overcome such problems.
The adverse selection problem will be minimal. Unobservable health related behavior is highly correlated with othere observable variables such as income, age, gender, family history, etc. Again, this is no worse than in the probem faced by insurance market. Also, I know of no Western religions that forbid the transfer of body tissue from one person to another. I am sure they exist, but I believe them to be a small minority. The number of Baptists, Mormons, and many evangeligal Protestant sects, which prohibit drinking and smoking (Mormons only), far outnumber the Hindus (in the US) which forbid tissue transfers. Plus, those religions that opt out would simply raise the value of organ donations to others which would encourage healthy heathens. Note this has a side-effect of lowering the demand for organ donation. >> Second, wealth and health are positively ocrrelated. The increased wealth >> from pre-sale of organs will likely increase the health of the donor and >> organs. > >We're talking probably a few thousand dollars, conceivably $50k or so >(competition would drive it down fast), not enough to make life-altering >changes in habits. Maybe it would improve the life of any children, but >again, only marginally. > Actaully, the wealth/ health correlation should be very sensitive to income. For instance, many added saftey feautures in cars, such as better airbags or simply bigger cars, can be purchased. A traveler may choose to fly instead of drive. Also, more doctor visits, and specialized medicines can be consumed with only a small change in income. Smokers may switch from cigarettes to cigars. I can think of lots of examples like these. >Agreed. My biggest con against a market for organs that I bring up in class >as I discuss this is that you create the incentive for people to kill others >whose bodies are more valuable dead than alive. This is the criticism I hear most about the organ trade, and I think it is misplaced. Regulation (public or private) of the organ trade seems quite easy. The donor and recipient are easily identified. It is not like there would be a public pawn shop for body parts. Illegal organs should be quite easy to identify do the the strict medical requirements used in matching donors to recipients. Might there be a black market for organs? Yes. Will it be any worse than the conterfeit hot-pants market? I doubt it. Additionally, I think that there are reasons for a decline in the black market for organs when legal sales arise. On the supply side, if there is a thriving organ market the reward for committing murder for organs falls dramatically if not eliminated altogether. On the demand side, why purchase a stolen organ of questionable quality when there is a cheap substitute? It seems most of the illegal organs sold in the world are a product of the illegality of organ sales. A bad liver is better than no liver. JC
