THE EFFECT OF CADAVERIC KIDNEY DONATIONS ON LIVING KIDNEY DONATIONS: AN INSTRUMENTAL VARIABLES APPROACH

I. INTRODUCTION As of March 19, 2012, there are 113,465 patients awaiting an organ transplant. Only 28,535 transplants were performed in the previous year. (1) The critical shortage of organs is the result of an artificial price ceiling instituted by the National Organ Transplant Act (NOTA) of 1984, which legislates financial compensation for organs to be unlawful. For this reason, the current supply of organs is generated by altruistic cadaveric and living donors (LDs). These donors willfully supply organs without any expectation of compensation, but the decision to donate is not the same for both cadaveric and LDs. Unlike cadaveric donors (CDs) where the functional value of the organ to the donor is small, LDs must consider the potential long-term healthcare costs associated with donating an organ. These costs include an increase in mortality risk, morbidity risk, loss in quality of life, and lost wages generated by time away from work during recovery. Potential LDs and their recipients must weigh these costs versus alternative sources of organs (cadaveric organs and other LDs) and consider their own future demand for organs when deciding to donate. Even so, the number of LDs has increased dramatically from 1,769 in 1988 to 5,955 in 2008, an increase of 237% (Figure 1). Over the same period, the percentage of blood-related (or biological) donors has decreased from 93% to 60% of all LDs. Several factors can account for these changes: introduction of tax incentives for organ donation, compatibility websites, relaxing donor match requirements, and the implied responsiveness of potential LDs to increases in the number of persons on the waiting list for deceased donors (an increase from 40,000 to 52,000 from 2000 to 2009). (2) [FIGURE 1 OMITTED] The topic of organ donation has received considerable attention in both the academic literature and the press, but there is limited empirical evidence identifying potential causes for the increase in LD rates, the trade-offs between living and cadaveric kidney donations, and the change in LD composition from primarily blood-related donors to an increase in non-blood-related donors. (3) Two concurrent studies address the substitutability between living and cadaveric donations. Howard (2011) utilized geographic variation in waiting times for organ transplants to estimate the substitution effect. The author finds that a decrease of five kidneys from cadaveric donations is correlated with one additional living kidney donation. Sweeney (2010) exploits a discontinuity in panel reactive antibody (PRA) (4) blood levels within a regression discontinuity framework and finds a 10% increase in the likelihood of receiving a cadaveric donation decreases the likelihood of receiving a living kidney donation by 2-3%. We find similar results as these studies, but we utilize a completely different identification method. In this article, we propose using variation in traffic safety laws between states as an instrumental variable to identify the substitution patterns between living and cadaveric kidney donations. A benefit of our approach is that we can analyze how obesity influences the supply of donations, the demand for transplantation, and the use of living versus cadaveric donations. We also analyze substitutability across classes of LDs, which helps to establish the plausibility of our results and the mechanisms underlying the substitution effects. With respect to motor vehicle safety laws, we study how changes in seat belt, helmet, and speed limit laws indirectly affect the number of living donations by shifting the supply of cadaveric organ donations. Previous studies have considered how changes in these safety laws would affect motor vehicle fatalities and cadaveric donations. According to the Organ Procurement and Transplantation Network (OPTN), roughly 16% of cadaveric donations are the result of a motor vehicle accident (MVA). …