I thought that this might provide a good real world example of people making the trade off between health, wealth and situation.
Currently in India there are entire villagers which have sold off one of their kidneys. Kidneys sell for as little as $1070 ($US received on average) on the organ market. This is a growing trade with more and more live kidneys being sold each month.
After the operation, the donors have lower total productivity caused by a shorter life expectancy and higher rates of infection and illness to name but two factors. Overall the donors would have lower expected life long earnings, lower quality of life and higher risk of contracting disease.
For information on this issue try reading through
I pulled this off a website:
For years, India has been known as a "warehouse for kidneys" or
a "great organ bazaar" and has become one of the largest centers
for kidney transplants in the world, offering low costs and
almost immediate availability. In a country where one person out
of every three lives in poverty, a huge transplant industry arose
after drugs were developed in the 1970's to control the body's
rejection of foreign objects. Renal transplants became common in
India about thirteen years ago when the anti-rejection drug
cyclosporine became available locally. The use of powerful
immuno-suppressant drugs and new surgical techniques has
indirectly boosted the kidney transplant activities. The
dramatic success rates of operations, India's lack of medical
regulations and an atmosphere of "loose medical ethics" has also
fueled the kidney transplant growth. The result has been that
"supply and demand created a marriage of unequals , wedding
wealthy but desperate people dependent on dialysis machines to
those in India grounded down by the hopelessness of
poverty
A scary website on medical tourism:
http://www.mdinindia.com/kidneytransplant.html
A good article to start with:
http://jama.ama-assn.org/cgi/content/full/288/13/1589
As economists this situation becomes hard to analyze as the MB must exceed the MC for the assumption of rational behavior to hold. How then can as little as $1070 be worth the cost of life long lower quality of life?
This is the question I would like to open to the econ class:
While there is a clear argument for ‘desperate times, desperate measures’, and that not all economic assumptions hold to third world situations, how and why does this market still thrive?
Given that the MC of the donation incorporates a culmination of factors, and that the MB of the procedure consists solely of a one off cash payment with no follow up care provided, how can the economic models that we use to construct our current quality of life surveys be adapted and molded to fit this situation?
