By Gary Becker
THERE were about 50,000 persons on the waiting list for kidney transplants in the United States in the year 2000, but only about 15,000 kidney transplant operations were performed. This implies an average wait of almost four years before a person on the waiting list could receive a kidney transplant.
In addition, the cumulative gap between demand and supply for livers was over 10,000, which implies an average wait for a liver transplant of a couple of years.
In 2000, almost 3,000 Americans died while waiting for a kidney transplant, and half that number died while waiting for a liver transplant. Many also died in other countries while in the queue for an organ transplant. Some of these people would have died anyway from other causes, but there is little doubt that most died too early because they were unable to replace their defective organs quickly enough.
If altruism were sufficiently powerful, the supply of organs would be large enough to satisfy the demand, and there would be no need to change the present system. But this is not the case in any country that does a significant number of transplants. While the per capita number of organs donated has grown over time, demand has grown even faster. As a result, the length of the queue for organ transplants has grown significantly over time in most countries, despite exhortations and other attempts to encourage greater giving of organs.
In recent years, the US has taken several steps to improve the allocation of available organs among those needing them, such as giving greater priority to those who could benefit the most. These steps have helped, but they have not stopped the queues from growing, nor have they prevented large numbers of persons from dying while waiting for transplants.
Some countries use an 'opt out' system for organs, which means that cadaveric organs can be used for transplants unless persons who died had indicated that they did not want their organs to be so used. A study by Mr Sebastien Gay of the University of Chicago's Department of Economics shows that opt-out systems may yield somewhat more organs for transplants than the 'opt in' systems used by the US and many other nations, but they do not eliminate the long queues for transplants.
Balancing supply and demand
TO AN economist, the major reason for the imbalance between demand and supply of organs is that the US, and practically all other countries, forbid the purchase and sale of organs. This means that under present laws, people give their organs to be used after they die (or, with kidneys and livers, also while they are alive) only out of altruism and similar motives. In fact, practically all transplants of kidneys and livers with live donors are from one family member to another. With live liver transplants only a portion of the liver of a donor is used, and this grows over time in the recipient; the remaining portion regenerates over time in the donor.
If laws were changed so that organs could be purchased and sold, some people would give not out of altruism, but for the financial gain. The result would be an increased supply of organs. In a free market, the prices of organs for transplants would settle at the levels that would eliminate the excess demand for each type of organ.
In a paper on the potential of markets for live organ donations, Professor Julio Elias of the University at Buffalo and I estimate that the going price for live transplants would be about US$15,000 (S$20,300) for kidneys and about US$35,000 for livers. We recognise, however, that the data is too limited to be confident that these numbers would be close to equilibrium prices that equate supply and demand - they may be too high or too low. But even if our estimates were only half the actual equilibrium prices, the effect on the total cost of transplants would not be huge since current costs for live transplants in the...