Gary Becker's last paper: appropriately, on a monetary market for kidneys (with Julio Elias and Karen Ye, JEBO, 2022)

 Gary Becker, who passed away in 2014, has a new paper, finished by his coauthors Julio Elias and Karen Ye. It recounts how the shortage of transplantable kidneys has only increased as the demand has grown, and the argument for paying donors is as strong as ever.  (In the meantime, the obstacles to that approach haven't vanished.)

The shortage of kidneys for transplant: Altruism, exchanges, opt in vs. opt out, and the market for kidneys*  by Gary S.Becker, Julio Jorge Elias, and Karen J.Ye, Journal of Economic Behavior & Organization, Volume 202, October 2022, Pages 211-226 (Another link to the paper is here, temporarily.)

Abstract: "In 2007 we published a paper on organ transplants that used data from 1990–2005. We proposed a radical solution of paying individuals to donate kidneys, and claimed that this would clean out the waiting list for kidney transplants in a short period of time. In this paper, we revisit the topic, and examine 14 years of additional data to see if anything fundamental has changed. We show that the main altruistic based policies implemented, such as kidney exchanges or opt out systems for organ procurement, have been unable to solve the problem of shortages. Our analysis suggests that, because of the reaction of direct living donors to increases in other sources of donations, the supply curve of kidney transplants is highly inelastic to altruistic policies. In contrast, a market in organs would eliminate organ shortages and thereby eliminate thousands of needless deaths."

Here's the most relevant part of the first footnote:

*"We started working on this paper together with Gary Becker in 2011. In 2012, we presented the paper at the Law and Economics Workshop and the MacLean Center's Seminar Series of the University of Chicago. The paper was unfinished when Becker passed away in May 2014. In this version of the paper, we updated the data and made some additions. The paper preserves all the economic analysis that was developed in the last version that we collaborated with Becker.

"Becker wrote his first article about the organ shortage in 1997, as part of his monthly BusinessWeek Column. The article was entitled How Uncle Sam Could Ease the Organ Shortage. In the article, he “suggest(s) considering the purchase of organs only because other modifications to the present system so far have been grossly inadequate to end the shortage.”

"In the 2000s, Julio Elias collaborated with Becker in a paper that uses the economic approach to analyze the consequences of legalizing the purchase and sale of kidneys for transplants from both deceased and living donors. In 2014, Becker published with Julio Elias a column in the Saturday Essay section of the Wall Street Journal entitled Cash for Kidneys: The Case for a Market for Organs. For Becker, the problem of the organ shortage and finding ways to solve it was a lifelong project. This paper reflects some of his last thoughts on this problem."

Here are their conclusions:

"The current state of the market of kidney transplants is a disaster. Over the last years, the waiting list has grown in over 4000 individuals each year, while transplants have grown by only about 250 per year. The result has been longer and longer queues to receive organs. 4000 patients died each year while waiting 3 and a half years on average for a transplant. According to our estimations, the annual social cost of those who die while waiting for kidney transplants is over $7 billion.

"Neither kidney exchange programs nor opt out systems nor educational campaigns to increase donations from altruistic donors have solved the problem of shortages. The main reason for their mild effects, as we show in this paper, is that the altruistic supply curve of kidney transplants is highly inelastic to these type of policies because of the reaction of direct living donors to increases in other sources of donations.

"The only feasible way to eliminate the large queues in the market for kidney transplants is by significantly increasing the supply of kidneys. The introduction of monetary incentives could increase the supply of organs sufficiently to eliminate the large queues and thereby eliminate thousands of needless deaths, and it would do so without increasing the total cost of kidney transplant surgery by a large percent.

"A market for the purchase and selling of organs would appear strange at first. However, much as the voluntary military today has universal support, the selling of organs would come to be accepted over time. " advantages of accepting payment for organs would eventually become clear, and people will wonder why it took so long for such an ovious and sensible remedy to the organ shortage to be implemented.

***********

Some related earlier posts:

Another take on compensating donors:

Tuesday, August 16, 2022

Kim Krawiec interviews Frank McCormick on the kidney shortage (and how to end it)

Commentary on the  legal monetary market for kidneys in Iran (and how it differs from illegal black markets):

Monday, June 27, 2022

A Forum on Kidneys for Sale in Iran, in Transplant International

The Pontifical Academy of Science says that compensating donors is a crime against humanity:

Friday, February 17, 2017

Vatican statement on organ transplantation

All my posts on compensation for donors (not just kidney donors) are here.

And here's my 2007 paper on repugnance (that came out in the same issue of JEP as the Becker and Elias paper), and was a first attempt at understanding some of the obstacles that face proposals to compensate donors of kidneys (and other things):

• Roth, Alvin E. "Repugnance as a Constraint on Markets", Journal of Economic Perspectives, 21:3, Summer, 2007, pp. 37-58.

I'm slowly writing a book that will expand on it.

Cash for kidneys: letters to the editor of the WSJ

The recent Becker-Elias article, about which I blogged about my thoughts here, has drawn some letters to the editor, which the WSJ published under the headline Is a Market in Kidneys the Right Answer to Shortage? It is a tragedy when people die while waiting for a lifesaving transplant, but paying for organs isn't the answer.

One of them, by Sigrid Fry-Revere, doesn't fit the sub-headline. She advocates adopting something like the market approach in Iran. Her unedited letter, which she shared by email, is below:

Letter to the Editor of WSJ

Edited version ran Sat. Jan 2014

The Rest of the Story

I read with great interest Gary S. Becker and Julio Elias article “Cash for Kidneys: The Case for a Market for Organs” in Saturday’s WSJ.  Like so many others who have written on this subject, their article misrepresents the Iranian system of compensated donation.

Usually not much is said about Iran, because not much is known, but I went to Iran and spent nearly two months interviewing paid kidney donors for a documentary film I was planning. I visited six different regions and returned with over 200 transplant stories.  There are too many misconceptions about what is going on in Iran to explain in one letter, but the most important thing I would like to point out is that paid kidney donors are people, not commodities, and no matter what the economics of the situation, there is a human element that can’t be ignored.

You might think I’m going to say we should not pay kidney donors, or that I’m going to rage about how exploitive kidney selling is. Not so. I learned many things on my trip to Iran, but the most important was sometimes money is what makes helping others possible.

The issue isn’t how much a kidney is worth, but how to make helping economically feasible and how best to show appreciation. I disagree with economists who say you can put value on someone giving up part of their body to save another person’s life. A conscious, informed decision, to risk oneself for another is an invaluable gift both to the person and to society.

Iran is the only country in the world that has solved its kidney shortage, and it has done so by legalizing and regulating compensated donation.  In the rest of the world there are two options:  Altruistic donation and the black market. The third option only exists in Iran where the rule of law protects donors and recipients alike. Paid donors are not treated like criminals, as is the case when the underprivileged are exploited for their kidneys on the black market. 

The Iranian system has developed over 30 years and continues to improve.  Today, paid donors are secure in their knowledge that the system works to protect their rights as much as the rights of recipients. Their money is put in escrow, the middlemen who arrange kidney matches are NGO volunteers, not black market profiteers, and they are treated on the same medical wards and in the same post-operative clinics as kidney recipients.  

How much are Iranian kidney donors paid for their service to humanity? Much more than the thank you, travel expenses, and occasional lost wages, paid altruistic donors in the United States. Iranian kidney donors receive the equivalent to six month’s salary for a registered nurse in Iran, or approximately $32,000 in the United States. But in addition to monetary compensation, they receive many goods and services that are hard to quantify in dollars.  All receive at least one year of health insurance, not just care related to their nephrectomy, as is the case in the United States. They also receive automatic exemption from Iran’s two-year mandatory military service.

Furthermore, Kidney donors often receive extra health insurance, sometimes for their whole family and often under terms where it can be renewed annually. They receive dental care at the NGO dental clinics that serve diabetes patients and kidney recipients. They receive job services, small business loans, and household goods.  I estimate the total average package paid donors receive in Iran is close to $45,000 in value. 

Most importantly, these paid donors know the government supports them for having done something honorable, like a paid firefighter or a paid emergency medical professional. They have saved a life -- and their contribution to society is invaluable.  Mohaghegh Damad, the ethicist for the Iranian Academy of Medical Sciences told me no payment could ever be enough. But, the payment Iranian kidney donors get, makes doing the right thing easier. 

In the United States 20-30 people die every day because they can’t get a kidney. Iran is the only country in the world where almost everyone who medically qualifies to get a kidney gets one, and in many regions of the country there is a waiting list for people who want to donate.  Maybe its time we learn something from their experience.

Sigrid Fry-Revere, J.D., PhD, is a bioethicist and founder and president of the non-profit organization Stop Organ Trafficking Now and author of The Kidney Sellers (Carolina Academic Press, 2014).

Cash for Kidneys: The Case for a Market for Organs. Becker and Elias in the WSJ

Gary Becker and Julio Elias have a reprise of their 2007 Journal of Economic Perspectives paper in this weekend's Wall Street Journal, in a cogent column called Cash for Kidneys: The Case for a Market for Organs.

Their 2007 JEP paper was called  Introducing Incentives in the Market for Live and Cadaveric Organ Donations (slightly more direct link here).

Between then and now the number of people on the waiting list for kidneys has gone up. Their 2007 article has these sentences: "Almost 17,000 persons were waiting for a kidney transplant in 1990. But this number grew rapidly, so that about 65,000 persons were on this waiting list by the beginning of 2006."

This weekend's WSJ column starts with the sentence "In 2012, 95,000 American men, women and children were on the waiting list for new kidneys, the most commonly transplanted organ."

So, the arguments that they repeat have gotten stronger over time: the shortage of organs is costly in every sense, and could likely be relieved by allowing kidneys to be bought and sold by live donors, and allowing the purchase of organs from deceased potential donors, i.e. by repealing the part of the 1984 National Organ Transplant Act that makes such sales a felony in the United States. (Similar laws exist in most of the developed world: the only country that seems to have an explicitly legal market for kidneys is Iran, although many black and grey markets exist.)

So, why hasn't this argument made any headway, either in the U.S. or overseas? Is patient repetition of the argument the best way to make the case? I don't know the answers, but I think that the repugnance of organ sales is a subject worth studying, not just for science but also for those who might like to influence policy.

In the same issue of the JEP as Becker and Elias (2007) was my article Repugnance as a Constraint on Markets (more direct link here), which sought to understand not just the repugnance to kidney sales, but to many economic transactions, in different places and times, e.g. to charging interest on loans, or having markets for slaves or indentured servants. I noted that kidney exchange doesn't arouse the repugnance that sales do. I've since blogged about a lot of different repugnant transactions including compensation for donors (as of this writing my most recent post on transactions that some regard with repugnance is headlined Womb transplants in Sweden (where surrogacy is illegal)...)

Note that the prohibition on organ sales is not some law that remains on the books merely through inattention. This is illustrated by the recent events surrounding the tug of war over whether it might be legal to compensate (even) bone marrow donors. Briefly, the ninth circuit court of appeals issued a ruling that said that in some circumstances bone marrow donors could be compensated, but then the Department of Health and Human Services proposed regulations that would keep the ban in place.   So the opposition to organ sales--even to compensating bone marrow donors--is alive and well.

But things don't go all in one direction. Bob Slonim reminds me that while we rely on unpaid donation of whole blood in the United States, most of our supply of blood plasma comes from paid donors.

I've participated in some efforts to understand better the repugnance to compensating organ donors, e.g. here's a survey with Steve Leider about who disapproves of kidney sales, and some correlates of such disapproval:
Leider, Stephen and Alvin E. Roth, ''Kidneys for sale: Who disapproves, and why? American Journal of Transplantation  10 (May), 2010, 1221-1227.

More recently, Muriel Niederle and I conducted a different sort of survey, which assessed the relative willingness of Americans to contemplate monetary rewards for the heroism associated with kidney donation:
"Niederle, Muriel and Alvin E. Roth, “Philanthropically Funded Heroism Awards for Kidney Donors?” forthcoming in Law & Contemporary Problems, 77:3, 2014.

Judd Kessler and I have a paper forthcoming in the American Economic Review papers and proceedings (May 2014) called "Getting More Organs for Transplantation," in which we summarize the issue this way:

"Kidney sales are often the leading example of a repugnant transaction cited by those who would put stricter limits on markets in general (e.g. Sandel 2012, 2013), because of their sense that such sales arouse widespread opposition. A representative sample survey of Americans conducted by Leider and Roth (2010) suggests that disapproval of kidney sales correlates with other socially conservative attitudes, but that it does not rise to the level of disapproval of other repugnant transactions such as prostitution. In addition, there is evidence that the manner of the payment to an organ donor may mitigate some of the repugnance concerns. Niederle and Roth (forthcoming 2014) find that payments to non-directed kidney donors are deemed more acceptable when they arise as a reward for heroism and public service than when they are viewed as a payment for kidneys."

That paper closes with this thought on the presently available options: 
"While these potential donors could save thousands of additional lives, at current rates of medical need, these donors alone would not be able to supply all the demand. Consequently, we must continue working on numerous fronts to solve this growing problem. "

In summary, the issue of whether and how organ donors might be compensated is an important policy issue that also touches on an important and still poorly understood social science phenomenon. Repetition of the basic arguments may move the discussion forward as the background facts become more severe, and it's great to see the issue addressed in such a public forum as the WSJ. But it may also be that repetition of arguments is not enough. To make progress in the face of opposition, it seems likely to be useful to understand better the nature of the opposition.