Rs. 8 lakhs ?– ? That`s the price a young squash player put on his kidney this week. The offer to sell an organ to finance his studies was not serious; Rather, it was a frustrated plea to point out its financial constraints. But the episode shed light on the state of the organ market in India. Currently, the maximum legal price for a human kidney is $0. The $0 price maximizes consumer A` surplus, but not the producer`s surplus. (B)the producer`s surplus, but not the consumer`s surplus. (C)consumer and producer surpluses. (D)neither consumer nor producer surpluses.
Consider an exchange. In the simplest form, a patient with a voluntary but incompatible donor can exchange a kidney with another pair of this type. Imagine that your spouse needs a kidney and you are ready, but you are incompatible. In an exchange, you give your kidney to another patient in exchange for a compatible kidney from another donor. There have even been examples of three-track exchanges that require a lot of coordination. Exchanges are popular because no money changes hands. But these are too few to remedy the shortage of organs. People are responding to incentives; Incentives do not always have to be financial in nature. But the right incentives can lead people to get the right results, no matter how disgusting the market may be. While it`s hard to imagine an Iranian-style kidney market in India, we can do better than our current system.
We must overcome our discomfort in considering organs as commodities and develop a pragmatic and just solution. Healthy people have two kidneys and, with proper care, can lead a long and fruitful life with only one. Since medically, an organ from a living donor is preferred to a recently deceased organ, with the right monetary incentives, we can have enough kidneys on the market for supply to be equal to demand. In an ideal world (where economists sometimes pretend to live), the market would also have regulatory controls and transparency to ensure fair trade of organs. It is difficult to get accurate statistics, but it is estimated that about 200,000 people need a kidney transplant each year, of which only 7,000 are lucky enough to receive one. Since 1994, the sale of organs has been illegal; The law only allows donations from deceased persons or a group of living donors. Not surprisingly, the implementation of the law was a failure. Every few years, there is a scandal in which vulnerable people are knowingly or unconsciously used as organ donors for patients who pay large sums of money to shady doctors. Economist Alvin Roth has defined markets such as organ trading as repugnant markets. These are markets where people find transactions morally unpleasant. Consider paying surrogate mothers, reducing prices after disasters, selling votes, and prostitution. We have an inherent aversion to introducing money into either of these transactions, because monetary value seems to diminish human dignity.
An altruistic act of donating a piece of your body becomes a blatant business deal of dubious morality. No law enforcement action will ever solve this problem – there simply aren`t enough donors to reach the number of people who need a kidney. From an economist`s point of view, the kidney market is a market where there is a large mismatch between supply and demand. The official price of the kidney is zero, but its value to a patient is much, much higher. In the absence of a “market clearing” price, the transaction moves to the grey market. Some economists have even proposed more innovative approaches where people get financial incentives to pawn their organs. For example, an options market where companies can buy the rights to a person`s organs in the event of the donor`s death. The donor`s family would receive the payment if he became a real donor. In order for this not to sound like a financial trade pushed to the extreme, you should consider the parallels with life insurance – you set a price for your life and then bet on the date of death.
Surprisingly, such a market exists. Iran is the only country that allows the sale of kidneys for living donors. Instead of private actors, kidney allocation is managed by a central authority that assigns patients to appropriate donors. For most patients, there is no waiting time because there are more donors than patients. In this system, the price of a kidney is about $5,000. The country`s top income is about three times that of India, so a comparable price in India would be around $1,500, or just over Rs 1 lakh. From this point of view, the price quoted by our young squash player seems exaggerated. Well, most readers will find this kidney treatment as an unappetizing and cold trade item; a misplaced extension of economic theories. It also conjures up a dystopian image of a world where the rich can legally harvest the poor for their organs. But the squeak disappears the moment you or a loved one has the misfortune of needing a kidney. (Shailesh Chitnis is a freelance journalist based in Bangalore.
He has previously written for The Economist.) India has one of the lowest organ donor rates in the world. Roth`s findings can help us find solutions that correct organic deficiencies while accepting our emotional concerns. Another method is a behavioural push borrowed from pension plans. Traditionally, most donors have to choose to become donors, i.e. explicitly sign their consent. But while most of us agree that it`s the right thing to do, very few do it. By accepting consent, unless a person indicates otherwise, the pool of available donors can be increased. Countries with explicit opt-out laws, such as Norway and Spain, have donor rates 25 to 30 percent higher than those requiring approval.