Introducing Incentives in the Market for Live and Cadaveric Organ Donations

Reading Summary - Introducing Incentives in the Market for Live and Cadaveric Organ Donations
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February 8, 2023
Becker and Elias (2007) present a model to analyze the market for live and cadaveric organ donations and evaluate the effect of incentives on the supply of organs. They argue that a market-based system could increase the supply of organs and save lives. The authors define live donation as the donation of a kidney by a living individual and cadaveric donation as the donation of organs after death.
The authors compare the market for live and cadaveric organ donations in terms of the supply and price of organs. The authors note that the supply of organs in the market for live donations is more responsive to incentives because the potential donor is still alive. The price of organs in the market for live donations is also more flexible because the donor can negotiate the terms of the transaction. In contrast, the supply of organs in the market for cadaveric donations is less responsive to incentives, and the price of organs is less flexible because the donor is deceased and cannot negotiate the terms of the transaction.
The authors use three elements to estimate the price of an organ: the cost of production, the expected benefit to the recipient, and the expected benefit to the donor. The cost of production includes the costs of finding a suitable donor, performing the surgical procedure, and providing post-operative care.
The expected benefit to the recipient includes improved health and increa...