MARKETS FOR ORGANS: THE QUESTION OF SUPPLY

Organ transplantation holds the potential to substantially restore the health of many otherwise terminally ill patients. That potential, however, is currently being denied full realization by a chronic and severe shortage of cadaveric organs that are made available for this use. In recent years, medical practitioners, social scientists, and others have debated the virtues of allowing markets for cadaveric organs to form as a way to end the current shortage. In this debate, market opponents have argued, inter alia, that (1) organ collections may fall with payment of positive prices and (2) the price required to equilibrate organ supply and demand would be high. On the other hand, proponents of organ markets have argued that financial inducements could save many lives and that the equilibrium price is likely to be low. While dozens of papers have been published debating this issue, to date no one has provided any empirical evidence to resolve these important questions of supply. This paper provides preliminary evidence suggesting that potential donors would be relatively responsive to financial inducements and, accordingly, that the price required to eliminate the current shortage of organs is surprisingly low. (JEL 118, L50)     

Enforcement Mechanisms Discouraging Black–American Presence in Suburban Detroit

In metropolitan Detroit, scholars have long observed that geographic space is racialized in the sense that black Americans are not welcome in many suburban communities. This extends beyond housing segregation: black drivers are not wanted on many suburban streets. While the existence of racial animosity has been documented, the enforcement mechanisms utilized to ‘protect’ certain geographic areas from black presence have rarely been quantified and dissected. This study examines police behavior toward black motorists who were arrested during routine traffic stops in the Detroit suburb of Eastpointe. Comparison of search, arrest, and handcuff patterns of white and black motorists indicates that police bias harms blacks. Rather than simply being anti‐black, patterns of police behavior in Eastpointe enforce racialized space, signaling where black presence is tolerated and where it is discouraged. Depuis longtemps, les intellectuels observent la racialisation de l’espace géographique, au sens que les Américains noirs ne sont pas les bienvenus dans de nombreuses communautés de banlieue de la métropole de Détroit. La tendance dépasse la ségrégation des logements: les automobilistes noirs sont indésirables dans bien des rues de banlieue. Si l’existence d’une animosité raciale a été documentée, les mécanismes coercitifs utilisés pour ‘protéger’ certaines zones géographiques d’une présence noire ont rarement été quantifiés ou disséqués. Cette étude examine l’attitude policière vis‐à‐vis des conducteurs noirs arrêtés au cours de contrôles de routine dans la banlieue de Eastpointe, à Détroit. Une comparaison des types de fouilles, arrestations et menottages d’automobilistes blancs et noirs révèle un préjugé de la police au détriment des noirs. Au lieu d’être simplement anti‐noirs, les types de comportement policier à Eastpointe impose un espace racialisé, indiquant là où la présence noire est tolérée et là où elle est dissuadée.     

Avoiding Accounting Fixation: Determinants of Cognitive Adaptation to Differences in Accounting Method*

Much research over the last 30 years has provided evidence that individuals display accounting fixation; that is, their cognitive process does not appropriately adapt to cross‐sectional or temporal differences in an accounting method. This paper presents the results of a quasi‐experimental test of the hypothesis that cognitive adaptation to a change in accounting method is an ordinal interactive function of three person characteristics: relevant accounting knowledge, general problem‐solving ability, and intrinsic motivation to appropriately engage in the decision task. Based on a product‐pricing decision task in which participants are provided with product costs reported by two generally employed product‐costing methods (activity‐based costing [ABC] and volume‐based costing), the results show that the majority of participants did not change their cognitive behavior when there was a change in the costing method. Further, those participants who did adapt to the change in accounting method, and thus avoided accounting fixation, did so by debiasing costs reported by volume‐based costing but not by ABC. Finally, these adapters generally exhibited high values for all three of the person characteristics compared with those who did not adapt.     

STOP US BEFORE WE SPEND AGAIN: INSTITUTIONAL CONSTRAINTS ON GOVERNMENT SPENDING

A distributive politics model establishes that the presence of exogenously enforceable spending limits reduces spending and that the effect of executive veto authority is contingent on whether spending is capped and whether the chief executive is a liberal or conservative. Surprisingly, when spending limits are in place, governments with conservative executives spend more than those with more liberal chief executives. Limits are welfare improving, as is the executive veto when it leads to the building of override coalitions. Using 32 years of US state budget data, this paper also establishes empirically that strict balanced budget rules constrain spending and also lead to less pronounced short-term responses to fluctuations in a state's economy. Party variables like divided government and party control of state legislatures tend to have little or no direct effect, with political institutions and economic indicators explaining much of the variation in state spending.     

A Labour Monopolies Commission to Reduce Unemployment

Mr Tebbitt's proposals to reduce union obstructiveness have not taken account of their power as monopoly suppliers of labour. A pressing priority for the current session of Parliament should be the introduction of legislation to eradicate legal privilege which does not reflect market reality.