How much for your Kidney?

Last night and this afternoon I will be lecturing about price ceilings and floors. There is the classic example of the minimum wage for price floors. Rent controlled apartments is the classic example for price ceilings, but my students did not seem to be familiar with rent control. So a new classic example for price ceilings: organ donation.

Right now the price ceiling is zero, you cannot sell your organs but you can give them away. As of 8am this morning there were 98,049 people waiting for a kidney, so there is a shortage of kidneys.
It is not just economist who are advocating kidney sales, but also physicians [link].
As one surgeon put it

"There's one clear argument for sales," Dr. Matas told a gathering of surgeons earlier this year. The practice, currently illegal in the U.S., "would increase the supply of kidneys, save lives and improve the quality of life for those with end-stage renal disease."

Dr. Matas and others will be speaking at the Cato Institute at noon today on this very subject [link].

There may be other unintended consequences of selling kidneys that should be considered, but the standard economic theory holds price ceilings can create shortages.