Transplanting Kidneys in Tehran

EconTalk Extra
by Amy Willis
Tina Rosenberg on the Kidney M... Being Wrong...

There's only one place in the world where individuals can be financially compensated for donating a kidney- Iran. This week, EconTalk host Russ Roberts chatted with New York Times writer Tina Rosenberg, as a follow-up to an earlier episode on matching markets with Nobel laureate Alvin Roth.

We'd like to hear your reactions on this controversial topic. Use the prompts below to start a conversation offline, and share your thoughts in the Comments to continue our conversation online. As always, we love to hear from you.

kidney transplant2.jpg

1. Rosenberg describes the process in Iran whereby a non-governmental organization coordinates donors and recipients. Of this process, she says, "You don't want brokers in the middle who are going to take a cut or who have a financial incentive." Go back and listen to this EconTalk episode from 2008 with Mike Munger on the economics of middlemen. If kidney sales were legal in the United States, do you think a for-profit broker would do a better or worse job than a non-profit broker?

2. The sharing economy has been the subject of many recent EconTalk episodes, as well as of a recent feature article. In this conversation, Roberts calls the Iranian kidney market the "ultimate example of the sharing economy." How appropriate is this analogy?

3. Toward the end of the conversation, Roberts mentions this clip from Monty Python's The Meaning of Life, a farcical account of a liver transplant. Have a look at the clip, then discuss how this clip illustrates some of the problems (and potential problems) faced in Iran's kidney market.

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COMMENTS (5 to date)
Trent writes:

Taking a stab at #1...

I went back and listened to Prof. Munger's podcast on middlemen again, and while some of the content was dated given the ongoing (at the time) subprime mortgage crisis, it in no way ruined the experience.

My main two takeaways from that podcast are that middlemen provide two key services: (1) the ability to physically get goods from Point A to the people who want to buy them (and that this is typically undervalued) and (2) they continuously to look for ways to innovate and cut costs, given their incentives to maximize profit.

To the question of for-profit vs. non-profit, I don't see how what is really just a tax distinction makes a difference here. Both firms can charge transplantees a fee, both firms can pay donors a fee, both firms can pay brokers a commission, etc., etc. The main difference is that the for-profit would pay out some portion of its profits to its owners in the form of dividends, while the non-profit would retain those profits (or pay bonuses, depending on the non-profit of course). Granted, the non-profit could solicit/accept donations to cover the cost of the transplantee and the broker, but that doesn't change the broker's job (assuming he/she isn't also going to do the fundraising, too).

I suppose the "spiel" of the non-profit broker to potential donors might be easier, as some people might find it more noble or pleasing to be donating/in partnership with, say, the American Red Cross or St. Jude rather than, say, Cigna or the Hospital Corporation of America.

Floccina writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Cameron writes:

For question 2 about the sharing economy:
I disagree that a sharing market as described by the referenced article is a suitable place to start when discussing the recent use of the term "Sharing Economy".

The modern use of the term sharing economy implies the transfer of an idle or under utilized asset, resource or value is time limited. At some point, the control of the transferred or shared asset, resource or value reverts back to the owner...

Not so in the case of the kidney transplant. Complete control of the kidney is transferred thus it does not qualify as part of the modern use of the term Sharing Economy.

Chris Sales writes:

This was a fascinating and illuminating discussion. Thank you for bringing it forward.

Unfortunately, I think this is the kind of issue where, in the US, emotion trumps logic.

Obviously there is no logical reason to let thousands die every year for lack of a kidney and tens of thousands more linger on waiting lists while suffering dialysis if there is any safe and fair way to procure healthy kidneys. Resistance to a free market in "extra" kidneys is solely based on emotional/philosophical arguments that count all this suffering for nothing.

As long as the US - unlike Iran - is willing to spend money it doesn't have on dialysis, it seems unlikely that the argument will be taken up in any serious way.

Tom Concialdi writes:

Check these guys out. This would be an interesting topic for econtalk.

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