Category Archives: School Choice Media Reprints

A Market for Kidneys (WSJ), November 13, 2007

In the Wall Street Journal on November 13, 2007 in an article title “A Market for Kidneys” the column ECON ONE ON ONE compiled the following views:

U.S. federal law has long banned any compensation for human organs, but with the demand for kidney transplants far outstripping the number of donors, some economists are urging the adoption of market-based innovations to increase supply.One of these is the University of Buffalo’s Julio Elias, who argues that, distasteful or not, monetary incentives are the most efficient way to boost the number of organs available for transplant, and should be introduced. On the other side, Harvard University’s Alvin Roth argues that cultural mores — repugnance — preclude buying and selling of organs. Instead, he says, alternative arrangements, such as so-called organ exchanges, might be a better solution.

What do you think? Join the discussion in our online reader forum.

Julio Elias writes: The only feasible way to eliminate the large queues in the market for kidney transplants is by significantly increasing the supply of kidneys. The introduction of monetary incentives could increase the supply of organs sufficiently to eliminate the large queues, and it would do so without increasing the total cost of kidney transplant surgery by a large percent, as Gary Becker and I show in a paper on the potential of markets for organs.

Even though the benefits of eliminating the organ shortage are significant, many people have opposed proposals to pay for organs, a practice prohibited under present law in almost every country.

Some critics argue that payment is “immoral” because it involves the “commodification” of body parts, or that the poor will be “coerced.” Others are opposed because they simply do not like the idea of the existence of a market for organs. However, conclusions about the morality of using prices to encourage supply or ration demand have changed in the past when they were shown to be effective. One example is a carbon tax to cut pollution; another is the use of willingness to pay to reduce the risk of death to measure the (statistical) value of life. Attitudes about using prices to help eliminate the shortage of organs would also change, I am confident, when it is shown how efficiently prices would solve this problem.

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Alvin Roth writes: Selling organs is illegal in most countries. Legalizing kidney sales faces substantial, perhaps insuperable obstacles. Just as you can’t sell yourself into indentured servitude anymore, some transactions are illegal because enough people find them repugnantBut many people are in urgent need of kidney transplants, so it’s helpful to think about steps to relieve the shortage now.

Kidneys for transplantation come from either deceased or living donors (a healthy person has two kidneys and can remain healthy with one). Some ways to increase the number of deceased donor kidneys include changing how donations are solicited (e.g. introducing opt-out rather than opt-in donor decisions), changing when kidneys are “harvested” (after heart-death, as well as brain-death), and changing which organs are selected (e.g. older patients might profit from organs from donors older than are now considered).

There would be more live-donor transplants if everyone who wanted to donate a kidney to someone could do so, but a healthy person’s kidney is often incompatible with his or her intended donor. So, one way economists have helped is in helping organize kidney exchanges, which allow incompatible patient-donor pairs to exchange with other such pairs. I’ll talk more about this work (with my economist colleagues Tayfun Sönmez, and M. Utku Ünver and many medical colleagues) in my next post.

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Julio Elias is an assistant professor in the economics department at the University at Buffalo. He is also an affiliated researcher in the university’s Center of Excellence on Human Capital and Economic Growth and Development. He teaches health economics and microeconomics theory. His recent work, with Gary S. Becker of the University of Chicago, has focused on markets for organs, as well as the non-monetary benefits and social returns on education. He received his doctorate in economics from the University of Chicago in 2005 and a bachelor’s in economics from Universidad Torcuato Di Tella in 1996.Al Roth is the George Gund Professor of Economics and Business Administration at Harvard University. He works in game theory, experimental economics, and market design. The best known of the markets he has designed (or, in this case, redesigned) is the National Resident Matching Program, through which approximately 20,000 doctors a year find their first employment as residents. He was involved in the reorganization of the market for gastroenterology fellows, which started using a clearinghouse in 2006. He is one of the founders and designers of the New England Program for Kidney Exchange, for incompatible patient-donor pairs.

Julio Elias writes: In an attempt to increase cadaveric organ donations, some nations have tried to overcome the objections of heirs by enacting into law the principle of “implied consent.” However, even with the capture of all potential deceased donor organs, the gap will not be closed.

Most organ procurements efforts in the U.S. have been concentrated on increasing the pool of altruistic donors, such as expanding living donor inclusion criteria and organ donor awareness campaigns. However, all these efforts have failed to increase the pool of donors significantly to alleviate the growing shortage of kidneys and prevent large numbers of people from dying while waiting for a transplant.

I agree with Al: Many people will be horrified by any proposal that allows for monetary compensations for organs and this represents a cost to society. But this does not mean that these costs overwhelm the benefits of eliminating the organ shortage. To my knowledge there are no good estimates of these “repugnancy costs.” Even so, I believe they are relatively small when weighted against the number of lives that can be saved. This is a strong force that will push towards a market-based system.

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Alvin Roth writes: I agree with Julio that there probably aren’t enough potential deceased donors to supply all needed kidneys. There are already more live donors than deceased donors in the U.S. Kidney exchange is a way to increase live-donor transplants.

Before 2004, in just a few cases an incompatible patient-donor pair and their surgeon were able to locate another such pair and arrange an exchange in which the donor in each pair could give a kidney to the patient in the other. In 2004 Ünver, Sönmez, and I published an article exploring how a centralized kidney exchange could permit transplantation of many more kidneys. In subsequent work we discovered that when the market is thick enough — when a large number of patient-donor pairs has been assembled — almost all feasible transplants can be accomplished through exchanges among just two or three patient-donor pairs at a time, and through chains of exchange. We’ve helped surgeons Frank Delmonico and Mike Rees organize regional kidney exchanges (NEPKE and APD) which now unite dozens of transplant centers, and there is movement towards a national exchange. Dr. Bob Montgomery in Baltimore and Steve Woodle in Ohio and their colleagues have also been pioneers; some description and history are here. (Read more about paired donations in a recent Wall Street Journal article.)

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Julio Elias writes: The current system of live organ transplants resembles an autarkic economy in which patients in need of an organ transplant are constrained to the organs available in the pool of friends and relatives. The kidney exchange system developed by Al and others is a barter system, and clearly will provide an improvement over the current system.

But a general conclusion of economics is that barter is an inferior system when compared to a money system, since barter requires the coincidence of wants. With the use of computers, and a national registry, multilateral barter is a good possibility, but still less efficient than using general purchasing power; i.e., a market. The main disadvantages of the kidney exchange system are the limitations that only kidneys from relatives and friends can be used and that the exchange must happen at the same time. A market-based exchange does not have such serious limitations.

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Alvin Roth writes: No economist could disagree with Julio that, in general, unrestricted monetary markets have enormous ability to meet human wants. As he points out, with kidney exchange we’re trying to achieve many of the benefits of a market without using money. We’re able to make progress because kidney exchange thus avoids the repugnance that kidney sales arouse. We’re slowly relaxing some constraints like the simultaneity of all transplants in every exchange: The Alliance for Paired Donation has recently begun a “never ending” altruistic donor chain that is still going on.

As market designers, my colleagues and I are often faced with constraints. (We have helped design non-monetary but market-like allocation procedures that assign children to schools in NYC and Boston and operate similarly to labor-market clearinghouses we’ve helped design for new doctors and older ones.) Sometimes constraints can be removed; sometimes, it looks more promising to work around them.

If Julio and his colleagues want to remove the legal constraint on buying kidneys, my guess is that they will want to understand better the sources of repugnance that have led to laws against such sales in so many countries.

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Julio Elias writes: The potential benefits of a market system may have seemed low compared to the costs of implementing a new system when the legal constraints were implemented, since the shortage was not so severe. Currently the kidney waiting list is over 73,000 persons, and in the last 10 years it has grown at an annual rate of 7%. Additionally, improvements in the safety and effectiveness in kidney transplantation have significantly increased the potential benefits.

Programs of financial compensation for living organ donors can take many forms. However, there are certain features that are likely to be common across any compensation system of organ procurement. More importantly, many of those features are in effect in the current system, like the role of the physician and transplant centers in the proper screening and selection of donors, in post-transplant care, and in other steps of the process of organ procurement. A national registry of potential donors is also likely to be assembled with all the relevant information of potential and excluded donors. In a decentralized system, the price of a kidney would be set at the levels that would eliminate the excess demand. Building on the value of life literature, with Gary Becker, we estimate that the price for a kidney would be about $15,000.

The present system imposes an intolerable burden on many very ill individuals, some of whom will die while waiting for a donor. It is time to reconsider the law.

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Alvin Roth writes: It is illegal to sell horsemeat for human consumption in California, not because a persuasive case was made that the costs exceed the benefits, but because 4,670,524 people voted to make it illegal in a 1998 referendum. This and many other examples persuade me there is something about repugnance that we economists need to understand.

Whenever I help design a market, I learn a lot from existing practices, even as I set out to modify them. Explaining what economists already know doesn’t inevitably win the day, although such explanations are certainly useful.

So it doesn’t seem to me inevitable that Julio and his colleagues’ arguments will lead, surely or soon, to a change in the laws banning kidney sales. And if kidney sales remain banned for a long time, other developments (such as cures for kidney diseases, or breakthroughs in using pig kidneys for transplantation) may arrive in time to make kidney sales, and human transplants themselves, unnecessary. This is one reason I have been putting my energy into developing kidney exchange: It’s a way to combine economics with surgical know-how to achieve real gains soon. I’ll be glad if something even better eventually becomes possible. It’s good to attack big problems from all angles. Thanks, Julio, for the discussion.

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Should the U.S. allow people to sell their kidneys? Vote, and share your views in an online reader forum.

Write to Matt Phillips at

School assignment flaws detailed (BG), September 12, 2003

The Boston Globe

School assignment flaws detailed

Two economists study problem, offer relief

By Gareth Cook, Globe Staff, 9/12/2003

Boston uses a deeply flawed system for assigning students to its public schools, pushing more students out of their top-choice schools than necessary and giving parents a reason to lie about which schools they want, according to a pair of researchers who recently published their findings in a leading economics journal.

A new system, they say, could greatly reduce the anxiety in the city’s annual school-choice process, in which thousands of parents submit lists of their top choices and await the computer-generated decision that will affect the next year to five years of their child’s education.

The researchers found that once the parents submit their lists, they are subject to a poorly designed method of allocating spots in the top schools. By using a different technique, they say, the city could get more students into one of their top-choice schools while also making the system fairer. The alternate technique, which the researchers outline in the paper, could be put in place with relatively simple, inexpensive changes and would not require the city to change any of its broader policies, according to the researchers and other academics who have seen the paper.

“Once all this is known, I don’t see how they can keep the Boston mechanism,” said Turkish economist Tayfun Sonmez, one of the researchers who studied Boston’s system.

For more than two decades, policymakers have devoted enormous amounts of attention to various ways to assign students to schools, sparking philosophical debates, charges of racial and economic discrimination, and tangled court battles — all of which have played out with particular drama in Boston. But the authors say their work, which also examined districts in Columbus, Minneapolis, and Seattle, is the first rigorous examination of how best to do the actual matching once the policy is decided.

The research has broader implications as well. If more parents were happier with their school assignments, it would help keep them from fleeing for the suburbs and bolster the fortunes of the school district — and the city. Officials with the Boston public schools and the Boston School Committee readily acknowledge that parents are frustrated with the current system, and officials said at a School Committee meeting this week that they would make changing the system a priority. They have not yet considered the method suggested by the economists.

“For every parent who feels frustrated about a policy, there is always a parent who will feel frustrated about an alternative,” said Christopher M. Horan, chief of staff for the Boston public schools. Horan said he was intrigued by the economists’ work and considered their suggestion a serious alternative.

In Boston, most students have to apply to get into kindergarten, first grade, sixth grade, and ninth grade. All students are given a priority ranking at each school, based on whether they have a sibling there, whether they live within walking distance, and a lottery number. And all parents rank the schools they would like their children to attend.

To begin, each school considers all the students who ranked it number one, and gives out seats in order of the student’s priority at that school. Then, each school that still has room considers all the students who ranked it number two, and again gives out seats in order of student priority. This process continues until all the students are assigned a spot or no more schools are left on a student’s list — in which case the student is “unassigned” and ends up at a school that still has an empty spot.

The problem, as parents quickly figure out, is that many of the best schools fill up in the first round, so students who don’t get into their first choice can find themselves crowded out of all their top choices.

“It is crazy,” said Kathy Bear, a West Roxbury mother whose 5-year-old daughter, Kaitlyn, didn’t get any of her top choices for kindergarten, and was assigned to a distant, troubled school in Dorchester.

Parents who learn how the system works begin to “game” it by lying about their top choices, ranking a less desirable school first in the hope that they’ll have a better chance of landing a spot. Now that she understands the system better, Bear says she will be more strategic in her selections for first grade.

Another problem, according to the economists, is that the Boston matching technique leads to situations where a student doesn’t get into a school even though he or she is higher on the school’s priority list than a student who did. This happens because as soon as a school fills up, it no longer considers any more applicants, no matter how high the student might be on the priority list.

A better alternative, said the researchers in the June issue of the American Economic Review, is a system similar to the national “matching” process used to assign residencies to medical students.

This system starts the same way as the method now used in Boston, with each school considering students who rank it number one and accepting them in order of their priority at the school. The critical difference, said Atila Abdulkadiroglu, a co-author of the study and an assistant professor of economics at Columbia University, is that this initial assignment is only temporary.

In the next round, students who didn’t get into their first choice are allowed to apply to their second choice. That school then considers these students, along with all the students temporarily assigned to it, and gives out all of its seats in order of the students’ priority. This process repeats, with any unassigned students applying to the next school on their list, and getting in if there is room — or bumping other students if they are higher on the priority list.

When all students have been assigned, the process ends, and the assignments become final.

This method has several advantages, according to the study. First, the best strategy for parents is always to list the schools in their true order of preference. The technique also eliminates all cases of a student losing a spot to a lower-priority classmate.

An experiment run by Sonmez, who is an associate professor of economics at Koc University in Istanbul, and University of Michigan economist Yan Chen also indicates that the method is likely to make more students happier with their assignment. In the experiment, which used 36 students vying for seven schools, most students wound up at a school that was slightly higher on their list of preferences.

Of course, no new system can create more seats at the most sought-after schools. But all parents interviewed by the Globe said that it would be a huge relief simply to write a truthful answer to the question: What school do you want?

“A lot of the alienation some parents have toward the choice system is solely attributable to the alienation of not making your first choice your first choice,” said Neil Sullivan, the father of four children who have attended Boston public schools.

Gareth Cook can be reached at

© Copyright 2003 Globe Newspaper Company.