MARKET FOR ORGANS

In class, we've discussed markets as they apply to everyday kinds of commodities -- apples, cars, basketball
tickets, etc. -- but what about market applications to non-traditional areas?

INTRODUCTION
DID YOU KNOW . . .?
• The US government has essentially capped the price of organs at $0 -- to sell human organs is illegal
in this country.
• In recent years, medical advances have enabled us to fight disease and lengthen lifespans, especially
in developed countries. As a result, however, there is now an increasing need for organ transplants.
• In 1991, approximately 27,000 people were on a waiting list to get a kidney transplant. In that same
year, only 9,000 people were willing to donate kidneys.

• All of us have two kidneys, but can survive (and in fact live a normal life) with just one. This, of
course, means that it is possible for anyone to decide to offer up one of his/her own organs, if the
proper incentive exists. For some individuals, the incentive is altruistic (saving someone else's life is
reason enough to be a donor), but for others, the incentive would have to be financial. Think about
this question: What would your price be?

ASSIGNMENT
Please read carefully through the entire assignment, then answer the following (responses do not need to
be typed, but they do need to be legible):
1. Go to the Organ Procurement and Transplantation Network (OPTN): https://optn.transplant.hrsa.gov/data/
Need help finding what you need? See “Assignment Appendix” at the end of this document.
a. BE SURE TO USE THE MOST RECENT COMPLETE YEAR (if you choose the year that we are currently in, you will
not get a full year's worth of information). According to the most recent UNOS figures, a total of __________
people are waiting for a kidney transplant, while _________ total kidney donors were available last year.

b. Is the market for kidneys in equilibrium? How do you know?

c. If the market is not in equilibrium, are we currently looking at a market shortage or a market surplus? How do
you know (using precise and appropriate terminology for defining shortage or surplus from the textbook)?

d. How large is the shortage/surplus, if it exists (i.e., how many units)? ______________

e. What are the implications of these numbers? I.e., what does this mean for individuals and society?
2. Compare the most recent annual figures to the 1991 figures that were given in the introduction of this assignment.
a. Was the market in equilibrium back in 1991? _______

b. If not, was there a shortage or a surplus, and how large? ______________________________________

c. What NUMERICAL CHANGES have been occurring in demand from 1991 to the present?

d. Show what has been happening to the demand for kidneys and the supply of kidneys in a (FULLY LABELLED)
market diagram:
MARKET FOR HUMAN KIDNEYS

e. What factors can you think of that have most likely been contributing to the change in the market that you have
illustrated above? For this question, I'd like you to write down AT LEAST THREE FACTORS EACH that have been
affecting the DEMAND for and the SUPPLY of kidneys as illustrated above. Having trouble? Try this article from The
Economist: https://www.economist.com/international/2008/10/09/the-gap-between-supply-and-demand
Factors that have affected the DEMAND: Factors that have affected the SUPPLY:
•
•

•
•
•
•

3. Who are the current suppliers in the market for kidneys, and what are their incentives to supply this particular
commodity with the existing market restrictions? (When responding to this question, consider that as discussed in
class, sellers in a market are motivated by profit -- how do these suppliers "profit" or "benefit" if the price is legally
set at zero?)
4. What would your personal (rock-bottom) selling price for one of your kidneys be? $_____________________
HOW, PRECISELY, DID YOU ARRIVE AT THIS NUMBER? Justify your answer below by listing your SPECIFIC cost
considerations -- both monetary and non-monetary -- as a supplier. Be sure to show the calculation of your
minimum costs that need to be covered.

TAKE A SURVEY. Ask five other people (NOT your Economics classmates) what their rock-bottom price would be in
order to provide one of their own kidneys TO A STRANGER (this question is NOT about donating to a friend or
family member).
v DO explain to survey participants all of the potential types of costs that you have considered above
v DO NOT tell survey participants what your rock-bottom price is -- it may color the responses that you get:

Person# Minimum Acceptable Price

1 $
2 $
3 $
4 $
5 $

DID YOU KNOW…? In September 1999, a living-donor kidney was put up for auction on e-bay. According to the
article below, bidding reached $5.75 million before the auction site blocked the sale as an illegal transaction (just
something to keep in mind if people say they wouldn’t accept ANY price for a kidney…):
 a. Based on the information that you've gathered here, the minimum observed selling price that we have in this
market is $_____________, while the maximum observed buying price is $_______________. While this may not
represent the full range of possible prices in the market (as demonstrated by our market exercise in class), we
certainly have some subset of the complete range. Perhaps more importantly, we now have information that we
did not have before.

b. What would be your best guess as to where the equilibrium price would be? Support your educated guess with
the data that you have collected here, and with intelligent speculation as to whether/why the price would be likely
to satisfy the definition of “market equilibrium” (INSTRUCTOR'S NOTE: taking an average of your prices is NOT
intelligent speculation, unless you have a powerful explanation as to why that price is likely to satisfy the
definition of equilibrium).

5. Who would be the suppliers be in a market for kidneys that was free of price restrictions (i.e., where the market
price CAN be charged), and what are their incentives to supply this particular commodity?

6. Use the table to list your ideas on potential outcomes (positive & negative) of allowing payments for human kidneys.
IMPORTANT NOTE: PLEASE DO NOT WRITE ABOUT people left in bathtubs of ice with their kidneys stolen. This story
is an urban legend – you can check for yourself (https://www.snopes.com/fact-check/youve-got-to-be-kidneying). This
sort of kidney theft is, for the moment, medically impossible.

Positive Outcomes (BENEFITS) Negative Outcomes (COSTS)

 CONCLUSION
You have now considered some of the existing difficulties with both sides of the market for kidneys, the
existing system, and considered the possibility of an alternative system. On balance, is society better off under
the current system of barring monetary payments (or any other benefits to organ providers), or would
providing compensation for suppliers yield a better result (for individuals and society as a whole)?
You must justify your response by including analysis of the cost-benefit information you have gathered.

RESPONSE:

 MARKET FOR ORGANS – ASSIGNMENT APPENDIX
Where to find accurate kidney donor info at the Organ Procurement data site:
1. Click on “View data reports,” then choose “national data.”
You should now see the following pulldown menu options:

2. Choose the category “Donor,” and the organ “Kidney.” Then click “All Donors by Donor Type.”
This will give you a complete set of data from year to year.

3. Examine the data! Remember, the year that we are currently in is not a FULL year, so select the most recent
completed year: