The Economics of organ transplantation

In the U.S. and Europe, a ban on a market in human organs has been in place since 1984. The system of organ procurement, therefore, relies on altruistic donation from stranger to stranger. The principle intellectual and policy issues surrounding organ procurement concern the question of whether, in banning the market to further ethical objectives, efficiency must inevitably be sacrificed. In the 1970s, Titmuss questioned whether a market could supply high quality blood in sufficient quantity, and this issue attracted the attention of some of the best minds in economics, such as Arrow and Solow. Since then, a large-scale industry relying on human tissue as a basic resource has emerged. In 2000, nearly 50[thin space]000 organs were transplanted. Remarkably, all of them were procured without providing financial incentives to suppliers. Despite the large number of donations, many more are needed. Today, more than 95[thin space]000 people are waiting for kidneys alone, and it is estimated that, in 2001, over 6000 Americans died waiting for an organ. Many believe that a market in organs would yield a greater supply and they hold the policy of banning an organ market responsible for the current tragic shortages. This chapter reviews the economic theory and evidence regarding market bans and considers them in the context of organ procurement.