December 3: Professor Nicola Lacetera

Paying for Kidneys? A Randomized Survey and Choice Experiment

Nicola Lacetera (with Julio Elias and Mario Macis)

Abstract: Regulation and public policies are often the result of competition and compromise between different views and interests. In several cases, strongly held moral beliefs voiced by societal groups lead lawmakers to prohibit certain transactions or to prevent them from occurring through markets. However, there is limited evidence about the specific nature of the general population’s opposition to using prices in such contentious transactions. We conducted a choice experiment on a representative sample of Americans to examine preferences for legalizing payments to kidney donors. We found strong polarization, with many participants in favor or against payments regardless of potential supply gains. However, about 20% of respondents would switch to supporting payments for large enough supply gains. Preferences for compensation have strong moral foundations. Respondents especially reject direct payments by patients, which they find would violate principles of fairness. We corroborate the interpretation of our findings with the analysis of a costly decision to donate money to a foundation that supports donor compensation.