Market for Organs
Webquest by Mary McGlasson & Nancy Short, Chandler-Gilbert Community College

Introduction | Assignment | Conclusion

Introduction

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?

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
To complete your task, you must PRINT OUT THIS ASSIGNMENT NOW. 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. CLICK HERE to go to the United Network for Organ Sharing (UNOS): Critical Data.

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.

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

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

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

What are the implications of these numbers? I.e., what does this mean for individuals and society?
 
 
 
 
 

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

    What numerical changes have been occurring in demand over the last 10 years?
 

    Show what has been happening to the demand for kidneys in a (fully-labelled) market diagram:

    What factors can you think of that have most likely been contributing to the change in the market that you have illustrated above? For example, you might say that people adopting more health-conscious lifestyles leads to longer lifespans, which in turn alters the demand for kidneys. For this question, I'd like you to write down at least three factors (more than three is OK, too!). If you consider what drives the demand side of this market, you should be able to come up with several factors on your own. If you really get stuck, you may find some ideas to get you started at the National Kidney Foundation (click here) website.
 
 
 
 
 
 
 
 
 

4. What would your personal (rock-bottom) selling price for one of your kidneys be? $_____________________
Justify your answer below by discussion your cost considerations -- both monetary and non-monetary -- as a supplier.
 
 
 
 
 
 
 
 
 
 
 

TAKE A SURVEY. Ask five other people (NOT your Economics classmates) what their rock-bottom price would be. Make sure that you DO explain to them all of the potential costs that you have considered above, but DO NOT tell them what your rock-bottom price is -- it may color the responses that you get:
 

In September 1999, a living-donor kidney was put up for auction on e-bay. According to CNN , bidding reached $_________________ before the auction site blocked the sale as an illegal transaction.

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.

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 more likely converge at the higher end or the lower end of the possible price range (INSTRUCTOR'S NOTE: taking the average of the high price and the low price is NOT intelligent speculation, unless you have a powerful explanation as to why the price would be expected to converge exactly in the middle of the price range).
 
 
 
 
 

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

 
 
 
 
 
 
 
 

Consider both potential positive and negative outcomes of allowing payments to kidney suppliers. Write your ideas in the table below:

IMPORTANT NOTE FROM THE INSTRUCTOR:
PLEASE DO NOT TELL ME  ABOUT people left in bathtubs of ice with their kidneys stolen. This story is an urban legend, a hoax.  You can either trust me on this or check for yourself at  www.snopes.comor any other urban legend site. This sort of kidney theft is, for the moment, medically impossible.
 

Beneficial Outcomes	Negative Outcomes

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, do you believe that the current system of barring monetary payments (or any other benefits to organ providers) is preferable, or would providing compensation for suppliers yield a better result (for individuals and society as a whole)?

Response: