Organ Markets in Israel
And what happened was exactly what economists said would happen:
Israel had 117 kidney transplants from living donors over the past year, 64 percent more than in 2010, according to the National Transplant Center’s annual report. In August 2010 living donors began receiving compensation of several thousand shekels, which may have contributed to the increase.
Compensation to living donors covers 40 days of lost wages and monetary benefits of up to NIS 30,000 for proven expenses of up to five years. These include transportation costs, supplementary and private medical insurance, disability insurance, life insurance, five psychological treatment sessions, and a week-long convalescence vacation.
And lives were saved
In the past year 105 Israelis died while waiting for an organ transplant, as opposed to 124 in 2010.
One interesting aspect of the new policy is very close to what I had suggested earlier
The Priority Law, which takes effect in April, will give holders of Adi donor cards priority if they ever need a transplant.
The number of cardholders has considerably increased recently following a publicity campaign touting the new law. Anyone signing the card before April will be immediately eligible for the benefit, while those signing after the law goes into effect will need to wait three years for eligibility after signing.
The number of organ donor signatures rose 71,229 during the year to a total of 632,300 while another 20,000 requests for the cards are being processed by the National Transplant Center.
(On a wonkish note, Tyler Cowen (Hat tip) off-the-cuff mentions that this means that the supply of organs is elastic i.e highly responsive to price. Actually, given that the price went up by effectively infinite times what it was (zero) while supply went up by only (!) 64%, it appears that supply is actually pretty inelastic, at least near the base price of zero, in Isreal and without international trade. This is not a bad thing: it means that if we legalize organ donations, the price will have to be quite high in order to clear the market – which means the benefits of legalization are quite substantial for “suppliers”.)