Economic Analysis of Organ Market

Nowadays, with substantial improvements in medical technology, a mix of the increase in demand for transplants and the low supply of human transplantable organs has been one of the most critical issues in medical treatment. Every year, many people who need transplants die. Different countries have implemented various policies to solve this problem. One proposed solution is creating a free market for human body organs. In practice, there is no such a market in almost all countries. This paper purports to shed light on the legal feasibility of creation of this market and its potential for reaching an equilibrium between demand and supply for body organs for transplant from an economic perspective.Findings based on economic analysis suggest that pure altruism is not efficient enough to solve the above-mentioned problem. In contrast, pecuniary incentives can help increase the supply of living and brain-dead donors, narrowing the gap between demand and supply in the body organ market. Besides the free market in which parties are free to determine terms of trade freely, there are other mechanisms in which a third party like the government, insurance, or NGOs is involved in regulating different aspects of the exchange, such as price. Along with other organ procurement policies, if the government can establish a formal and transparent mechanism for the voluntary exchange of organs, besides increasing efficiency, it can also prevent the formation of a black market or human trafficking to a great extent.It is worth mentioning that there is no consensus among economists about establishing a free market for body organs. The critiques have proposed some non-pecuniary-oriented policies such as default rules, mandated choice, required recovery, reciprocal systems, and pairwise kidney exchange. Despite its potential advantages, this market is also challenging. So, it is necessary to consider its legal and ethical aspects to guarantee its efficiency. Pragmatically, establishing this market requires considering its ethical, legal, and economic features. In addition, due to the complexities of the problem, it seems that applying a bunch of different policies is required to bring about society to its ends.