Friday, December 21, 2012

Blood Plasma and Economics

Here the New York Times reports on the market for blood plasma.  While there are those concerned with the safety of getting blood plasma from the poor.  Yet, "[t]here have been no known cases of an infectious disease being transmitted through plasma products for more than a decade. And since the body quickly renews its plasma, the process is considered safe for donors if properly monitored."

Winston Churchill said, "Capitalism is surely the worst economic system, except for all the others that have been tried."  Here is a great example.  The market for blood plasma can be thought of as exploiting poor people or young people (college students) by providing them a small payment for a rather vital "product".  Yet in a market system, people are able to choose whether to sell a good (blood plasma) for another good (money).  Some do, and some do not.  The other option is to rely on altruistic behavior (such as for kidneys).  The problem is that the amount supplied under this system tends to be less than the amount demanded.  Hence the pricing mechanism is used to get those willing to supply their blood plasma to those that are demanding blood plasma.  

If those that are concerned about the "exploitation" of the poor or the young for relying on blood plasma donations, from the article above the answer seems to be to lower the price (to zero) - but if they are really concerned about the amount that is supplied from the poor or young, would the answer be to raise the price, so that more people would be willing to give blood plasma?

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