Valuing human organs: an application of contingent valuation

Abstract

Purpose

This paper aims to estimate a supply response to monetary incentives to donate organs using a survey based on Adams, Barnett and Kaserman.

Design/methodology/approach

The paper uses bootstrap techniques to estimate the characteristics of individuals and their willingness to accept monetary compensation for an organ donation commitment. It uses the estimates to fuel a simulation that examines the relationship between a market‐clearing price and the usability rate. The usability rate is the proportion of deaths that result in tissues that are viable for transplant.

Findings

By analyzing the relationship between usability rate and market‐clearing price, the paper identifies three important ranges. When the usability rate is about 5 percent, a donation‐only system (zero price) should clear the market. At a usability rate between 2 and 5 percent, modest monetary incentives can attract a supply response that will clear the market. When the usability rate is less than 2 percent, supply becomes sufficiently inelastic so that even large monetary incentives will not solve the shortage problem.

Practical implications

If the market mechanism were capable of yielding a greater number of organs for transplantation than the current system, then its adoption would save numerous lives and significantly reduce the cost of treating a variety of serious diseases. Also, it is useful in a benefit‐cost analysis framework designed to measure the social value of refinements in the coordination system.

Originality/value

By relating the market‐clearing price of organs to their usability rates, this paper draws attention on the importance of interdisciplinary studies.

Citation

Altinanahtar, A., Crooker, J.R. and Kruse, J.B. (2008), "Valuing human organs: an application of contingent valuation", International Journal of Social Economics, Vol. 35 No. 1/2, pp. 5-14. https://doi.org/10.1108/03068290810843800