Incentives and ethics in the economics of body parts

Repugnant markets are an relatively new area of economics - associated with the work of Nobel winner Alvin Roth - and one that many people find strange and unsettling but it is also one that has very important implications for people's welfare. And there is no more important area than the "market" for human body parts. This is an area where demand outstrips supply in a big way and we need ways to get more people to donate. But many people don't like the idea of using monetary incentives to increase donations.

In this new NBER working paper Nicola Lacetera looks at some of the economic and moral issues involved in organ markets.

The abstract of the paper reads:

Research shows that properly devised economic incentives increase the supply of blood without hampering its safety; similar effects may be expected also for other body parts such as bone marrow and organs. These positive effects alone, however, do not necessarily justify the introduction of payments for supplying body parts; these activities concern contested commodities or repugnant transactions, i.e. societies may want to prevent certain ways to regulate a transaction even if they increased supply, because of ethical concerns. When transactions concern contested commodities, therefore, societies often face trade-offs between the efficiency-enhancing effects of trades mediated by a monetary price, and the moral opposition to the provision of these payments. In this essay, I first describe and discuss the current debate on the role of moral repugnance in controversial markets, with a focus on markets for organs, tissues, blood and plasma. I then report on recent studies focused on understanding the trade-offs that individuals face when forming their opinions about how a society should organize certain transactions.