Originally posted on May 3, 2010.
The shortage of transplant organs raises many issues that can be usefully discussed in a principles of economics class. Most obviously, the prohibition on compensating organ donors can be thought of as a price control. Thus, one potential solution is lifting the price control and compensating deceased donation or live donors.
There are other potential solutions with economic content, such as giving people who sign their organ donor card priority should they one day need an organ or presumed consent. Clearly, compensating organ donors also brings to the fore many ethical issues–see our chapter on Economics, Ethics and Public Policy for a discussion of some of these issues. In addition, the ethical issues are not necessarily separable from the economic ones. It is possible, for example, that payment for donors could “crowd out” altruistic donation.
My powerpoint slides, Using Incentives to Increase Kidney Donation, have some useful background information on the shortage of organs and also discuss some of the innovative programs that have begun elsewhere in the world that may help to alleviate the shortage. Also excellent for promoting discussion is the video below from Drew Carey and Reason TV. Matt Holian suggests some ways of using this and other Reason TV videos in the classroom.