Evaluating school choice in Chicago isn't simple

The effects of school choice don't just depend on what school you go to, but also on what other school you could have gone to...

Choice and Consequence: Assessing Mismatch at Chicago Exam Schools

Joshua D. Angrist, Parag A. Pathak, Román Andrés Zárate

NBER Working Paper No. 26137
Issued in August 2019
NBER Program(s):Economics of Education, Labor Studies, Public Economics 

The educational mismatch hypothesis asserts that students are hurt by affirmative action policies that place them in selective schools for which they wouldn't otherwise qualify. We evaluate mismatch in Chicago's selective public exam schools, which admit students using neighborhood-based diversity criteria as well as test scores. Regression discontinuity estimates for applicants favored by affirmative action indeed show no gains in reading and negative effects of exam school attendance on math scores. But these results are similar for more- and less-selective schools and for applicants unlikely to benefit from affirmative-action, a pattern inconsistent with mismatch. We show that Chicago exam school effects are explained by the schools attended by applicants who are not offered an exam school seat. Specifically, mismatch arises because exam school admission diverts many applicants from high-performing Noble Network charter schools, where they would have done well. Consistent with these findings, exam schools reduce Math scores for applicants applying from charter schools in another large urban district. Exam school applicants' previous achievement, race, and other characteristics that are sometimes said to mediate student-school matching play no role in this story.

Andrews and Brunner Lecture at Lancaster University

Here's an announcement.
"Alvin Roth will deliver the inaugural Andrews and Brunner Lecture at Lancaster University on Monday, September 9."

Here's another:

"The Department of Economics is delighted to welcome Nobel Prize winner, Professor Alvin Roth to deliver the inaugural Andrews and Brunner Lecture.

...

Controversial Markets

Markets need social support to work well. Do bans on the marketisation of certain products work? Without sufficient social support, bans can be ineffective and can sometimes lead to active black markets. Roth will describe some examples of how these tensions have played out, for example, for markets for surrogacy, prostitution, and drugs. A particular example will be the almost (but not quite) universal ban on monetary markets for kidneys, and how this has influenced the treatment of kidney disease and the organisation of kidney transplantation around the world, including the development of kidney exchange.

Event Programme

6:00pm - Lecture

7:15 pm - Networking Reception

8:15pm - Close

Refreshments will be available at this event.

This inaugural lecture commemorates PWS Andrews and Elizabeth Brunner, two leading figures who significantly contributed to the success of the Economics Department from 1967 to 1983. Both Andrews and Brunner supported the nascent University’s growing reputation in Economics. They are fondly remembered by former students who benefited from their teaching.

Distinguished academic Professor Eyal Winter is the PWS Andrews & Elizabeth Brunner Chair in Industrial Economics at Lancaster University. An academic of Professor Winter’s calibre is an outstanding addition to the School, enabling us to continue the very highest levels of research, teaching and engagement.

**************

My talk will follow a Symposium on School Choice:

DNA tests are revealing medical misconduct in early sperm donation

The NY Times has the story, summarizing many recently discovered cases in which fertility doctors used their own sperm in place of other sperm donors:

Their Mothers Chose Donor Sperm. The Doctors Used Their Own.
Scores of people born through artificial insemination have learned from DNA tests that their biological fathers were the doctors who performed the procedure.

"With the advent of widespread consumer DNA testing, instances in which fertility specialists decades ago secretly used their own sperm for artificial insemination have begun to surface with some regularity. Three states have now passed laws criminalizing this conduct, including Texas, which now defines it as a form of sexual assault.

"Dr. Jody Madeira, a law professor at Indiana University, is following more than 20 cases in the United States and abroad. They have occurred in a dozen states, including Connecticut, Vermont, Idaho, Utah and Nevada, she said, as well as in England, South Africa, Germany and the Netherlands."
**********

There's an old saying that good judgement comes from experience, and experience comes from bad judgement.  The same thing might be said about well regulated markets...

New York City considers bill to ban foie gras

Bill aims to ban sale of foie gras in New York restaurants over 'cruel' process
If bill passes, anyone violating the law could be liable to a $1,000 fine, up to a year in jail or both

"New York City council is considering outlawing the product – which derives from duck or goose and translates as “fatty liver” – which is a staple at many of its top restaurants.

"Critics of foie gras say the process is cruel because ducks and geese are overfed through a pipe which can expand the liver up to 10 times its normal size.

The proposed bill, which could be voted on in months, would ban the sale of foie gras made from birds that have " force fed and establishments from serving it.
...
"If New York introduces a ban it will put the city alongside California, which has a state-wide ban on the production and sale of foie gras. Chicago passed a ban in 2006, but it was overturned two years later.

"Whole Foods banned its sale in 1997 and Postmates ended deliveries of it last year.

"Outside the US, Britain, Israel and India all have bans on sale or production."
***********

For a different view, French law (Code rural) states
"Article L654-27-1
Créé par Loi n°2006-11 du 5 janvier 2006 - art. 74 JORF 6 janvier 2006
Le foie gras fait partie du patrimoine culturel et gastronomique protégé en France. On entend par foie gras, le foie d'un canard ou d'une oie spécialement engraissé par gavage."

Google translate: "Foie gras is part of the cultural and gastronomic heritage protected in France. By foie gras, the liver of a duck or a goose specially fattened by gavage."

Economic Science Association meeting in Dijon, Sept 5-7

I'm travelling today to join the ongoing 2019 European ESA Meeting in Dijon, France.  Here's the program.

I'm going to speak on Saturday about Controversial Markets.

I'll also participate in a round table discussion on repugnant markets:
LE PRIX NOBEL D'ÉCONOMIE ALVIN ROTH À BSB
European Meeting de l’ESA du 4 au 8 septembre 2019, table-ronde "répugnante" le 7 septembre

"Le samedi 7 septembre à 14h, il participera à une table-ronde sur le thème "Triche, engagement et marchés répugnants", en compagnie de Martin Kocher, Directeur scientifique de l’Institut des Hautes Etudes de Vienne (Autriche), et Nicolas Jacquemet, Professeur à Paris School of Economics. Les échanges seront animés par Thibault Lieurade, journaliste, Chef de rubrique Economie + Entreprise à The Conversation France."

Marty Weitzman, 1942-2019

For many years, Marty and I both had offices on the third floor of the Littauer building at Harvard.  I didn't know him well, but he was a big thinker,  who thought unflinchingly about the tail-end dangers of climate change.

His obit in the NY Times suggests that he was despondent about the future.

Martin Weitzman, Virtuoso Climate Change Economist, Dies at 77
A pathfinder in environmental economics who insisted on factoring in the worst-case scenarios of global warming

"In “Climate Shock: The Economic Consequences of a Hotter Planet” (2015), Professor Weitzman and his co-author, Gernot Wagner, an economist at New York University, wrote: “One thing we know for sure is that a greater than 10 percent chance of the earth’s eventual warming of 11 degrees Fahrenheit or more — the end of the human adventure on this planet as we now know it — is too high. And that’s the path the planet is on at the moment.”

“Most everything we know tells us climate change is bad,” the authors concluded. “Most everything we don’t know tells us it’s probably much worse.”

"His analysis of the economics of climate change became known as the Dismal Theorem."

*************
Update: here's the Washington Post's obit:


Martin Weitzman, environmental economist who emphasized uncertainty, dies at 77

Two market design courses at Harvard this semester, by Kominers, and by Akbarpour and Li

If you are at Harvard this semester, you have two market design classes available:

Mohammad Akbarpour (visiting for the quarter from Stanford) and Shengwu Li will be teaching
SIMPLICITY & COMPLEXITY IN ECONOMICS
Fall 2019 T/Th 9 :00-10:15, ECON 2071

and Scott Kominers will again be teaching
ECON 2099, "Market Design"  

Efficiency and Stability in Large Matching Markets, by Che and Tercieux in the JPE

Efficiency and Stability in Large Matching Markets

Yeon-Koo Che

Columbia University

Olivier Tercieux

Paris School of Economics and Centre National de la Recherche Scientifique

ONLINE: Aug 30, 2019

Abstract

We study efficient and stable mechanisms in matching markets when the number of agents is large and individuals’ preferences and priorities are drawn randomly. When agents’ preferences are uncorrelated, then both efficiency and stability can be achieved in an asymptotic sense via standard mechanisms such as deferred acceptance and top trading cycles. When agents’ preferences are correlated over objects, however, these mechanisms are either inefficient or unstable, even in an asymptotic sense. We propose a variant of deferred acceptance that is asymptotically efficient, asymptotically stable, and asymptotically incentive compatible. This new mechanism performs well in a counterfactual calibration based on New York City school choice data.

"...we develop a new mechanism, called DA with circuit breaker (DACB), that is both asymptotically efficient and asymptotically stable. This mechanism modifies DA to prevent participants from competing excessively. Specifically, all agents are ordered in some manner (for instance, at random), and following that order, each agent applies one at a time to the best object that has not yet rejected him.5 The proposed object then accepts or rejects the applicant, much as in standard DA. If, at any point, an agent applies to an object that holds an application, one agent is rejected, and the rejected agent in turn applies to the best object among those that have not rejected him. This process continues until an agent makes a certain “threshold” number κ of offers for the first time. The stage is terminated at that point, and all tentative assignments up to that point become final. The next stage then begins with the agent who was rejected at the end of the last stage applying to the best remaining object and the number of proposals for that agent being reset to zero. The stages proceed in this fashion until no rejection occurs.

"This “staged” version of DA resembles standard DA except for one crucial difference: the mechanism periodically terminates a stage and finalizes the tentative assignment up to that point. The event triggering the termination of a stage is an agent reaching a threshold number of offers. Intuitively, the mechanism activates a “circuit breaker” whenever the competition “overheats” to such an extent that an agent finds himself at the risk of losing an object he ranks highly to an agent who ranks it relatively lowly (more precisely, above the threshold rank). This feature ensures that each object assigned at each stage goes to an agent who ranks it relatively highly among the objects available at that stage."

School choice at Chicago Booth

The University of Chicago's Booth school reviews school choice, with particular attention to Booth scholars:

Economics is changing how public schools and students choose each other

"Chicago Booth’s Seth Zimmerman got interested in school lotteries as an economics graduate student at Yale in the late 2000s. 
...
"Chicago Booth’s Eric Budish and UPenn’s Judd Kessler have found similar results [about families confused by complexity] for course allocation at the Wharton School at the University of Pennsylvania (see “You can’t always say what you want,” below). 
...
"In their research on New Haven’s schools, Zimmerman and his coresearchers wanted to quantify the effects of this sort of inequality, and particularly to understand how it played out in a system even more strategically complicated than New York’s. Past research assumed either that students and their families were strategizing correctly or that they were making one of a limited number of possible mistakes, such as not knowing their own priority group or playing naively by simply listing their choices in order of their preferences. 
...
"The researchers tried developing an app that would increase families’ understanding of their odds and help them strategize accurately. But they soon saw that simply adopting a truth-telling approach made more sense. Their work found an audience in New Haven Public Schools, and for the 2019--–20 school year, the city began employing a matching algorithm similar to New York’s.
...
"Chicago Booth’s Jacob Leshno says that currently most districts don’t use TTC systems, and he suggests a potential reason many have opted for DA instead: TTC systems are harder to explain to students who don’t get the schools they want. 
...
"However, Leshno and Stanford’s Irene Lo wanted to help administrators make full use of their options for school-matching systems by providing tools to help explain how TTC school-assignment algorithms work. Their research demonstrates it’s possible to explain matches under TTC systems to students and parents using the same palatable notion that applies to DA systems, removing a big impediment to their implementation." 

Alex Azar (Secretary of HH&S) writes about possible new kidney policies

In the New Hampshire Business Review, the Secretary of the U.S. Department of Health and Human Services writes about the recent executive order* concerning caring for kidney patients:

President is providing hope for kidney patients
August 29, 2019  Alex M. Azar

"To prevent kidney disease and provide more treatment options, we’re launching new ways for Medicare to pay for kidney care. For example, nephrologists will soon be able to receive bonuses for preventing the progress of kidney disease in their patients. We’ll give providers a financial stake in getting their patients healthy, as opposed to just paying them for performing more procedures.

"We have also proposed a Medicare initiative to give about half of America’s dialysis providers new incentives to provide patients with dialysis at home or even in their beds at night, rather than having them travel to dialysis centers. Today, only 6.1% of kidney patients in New Hampshire receive dialysis at home, an option that’s much more common in other countries.
...
"To provide more kidney transplants, we will be revising how kidneys are obtained from deceased organ donors, allowing better identification of kidneys for transplant. The executive order also calls for us to expand support for the generous living donors who choose to donate organs. Changing how we identify transplantable kidneys from deceased donors, by itself, could produce life-saving organs for an additional 17,000 Americans each year — including some of the 87 individuals currently waiting for a kidney in New Hampshire.
**************

*See earlier post:

Tuesday, July 16, 2019

President Trump's Executive Order on kidney care

HT: Frank McCormick

Predicting stable matches from the preferences of one side of the market: Haeringer and Iehlé in AEJ-Micro

Two-Sided Matching with (Almost) One-Sided Preferences
By Guillaume Haeringer and Vincent Iehlé
American Economic Journal: Microeconomics 2019, 11(3): 155–190.


Abstract: "In a two-sided matching context we show how we can predict  stable matchings  by  considering  only  one  side’s  preferences  and  the  mutually  acceptable  pairs  of  agents.  Our  methodology  consists  of  identifying  impossible  matches,  i.e.,  pairs  of  agents  that  can  never  be matched together in a stable matching of any problem consistent with  the  partial  data.  We  analyze  data  from  the  French  academic  job  market  for  mathematicians  and  show  that  the  match  of  about  45 percent of positions (and about 60 percent of candidates) does not depend on the preferences of the hired candidates, unobserved and submitted at the final stage of the market."


Haeringer and Iehlé present new theory and explore an interesting data set, described as follows:

"Market for Mathematicians
In 1998, a small group of young mathematicians set up a website, Opération Postes,  inviting  recruiting  committees  to  announce  the  lists  of  candidates  to  be  interviewed  as  well  as  the  rankings  of  candidates  that  will  be  submitted  to  the  clearinghouse (the ministry), as soon as these would be decided.19 The community of mathematicians was very responsive and the website quickly became a central tool  in  the  job  market.20  The  data  for  each  position  (interviewees  list  and  rank-ings) is usually uploaded by the the chairs of the recruiting committees themselves (and  if  not,  by  a  member  of  the  committee).  On  average,  about  90–95 percent  of  the  job  openings’  interview  lists  and  rankings  are  available.21  The  data  of  Opération  Postes  is  public,  although  not  in  a  format  that  makes  it  immediately  usable  for  any  analysis.  There  are  many  misspellings,  and  we  sometimes  found  confusions  between  the  married  and  maiden  names  of  some  female  candidates.  By  cross-referencing the data with other sources we were able to compose a clean dataset.22We  also  collected  for  each  year  the  assignment  of  candidates  to  departments.  This  assignment  is  computed  by  the  Ministry  of  Higher  Education  by  using  candidate’s  submitted  preference  lists  over  the  departments  and  the  rankings  of  candidates established by the recruiting committees."

Kidney donor athlete: Steve

Kidney donors have to be in excellent health, and the site Kidney Donor Athletes celebrates some exceptional donors, particularly as they return to their physically active lives after donating a kidney.

The recent entry Meet Kidney Donor Athlete, Steve!,  is inspiring on multiple levels. It is the story of the donor (and the people he met along the way) who started the chain at Virginia Mason hospital in Seattle, that I blogged about after hearing from the transplant nephologist Dr. Cyrus Cryst:

Monday, March 25, 2019

Followup on the latest Freakonomics kidney exchange chain

Here's how he describes his wife's reaction to his decision to become a non-directed donor:
"My wife said to me “This is the weirdest midlife crisis I have ever heard of.”  I told her, “You know, some guys buy Corvettes and have affairs.”  That quieted her down.  For a minute."

And here's a thought on where chains can go:
"I was elated to learn that the other donation would be to a Native Alaskan woman from Utqiagvik, Alaska, which is the northernmost town in the U.S.  Just think of how terrifying it must be to live in an Arctic village with a serious health problem.  Her odds of receiving a kidney were very small.  There is no way she could have gotten herself to Seattle in time to receive a deceased person’s kidney.  She does not live right around the corner.  And, having spent much of my working career sailing all over the Bering Sea and the Arctic Ocean, I have a deep emotional connection to Alaska.  It just felt right."
******

In separate correspondence, I learned that one of the hardships for Debbie, from Utqiagvik in Alaska, was that for some time after her transplant "it meant I couldn't eat raw whale muktak (outer skin and blubber of the whale ) which i love..."

Inter-caste marriage as a repugnant transaction in India: a hired hitman and a murdered groom

In the U.S. we've had long periods where the future of inter-racial and same-sex marriages were in doubt. In India, inter-caste marriage can still be dangerous.

Here's a story from the Washington Post, about a mixed-caste marriage, a hired hitman, and a murdered groom...

A young Indian couple married for love. Then the bride’s father hired assassins.
By Joanna Slater

"Hundreds of people attended the festivities on Aug. 17, 2018, but Amrutha’s parents were notably absent. Rao, her father, had already begun to plot Pranay’s murder, court documents say. The month before, he agreed to pay $150,000 to have his son-in-law killed, using a local political leader as an intermediary. Rao, 57, passed along a photo of the pair from their reception invitation to make it easier for the killers to identify Pranay, the documents allege."

Matching in Google's internal labor market

Bo Cowgill and Rembrand Koning have written a Harvard Business School case study called Matching Markets for Googlers

Abstract: "This case describes how Google designed and launched an internal matching market to assign individual workers with projects and managers. The case evaluates how marketplace design considerations—and several alternative staffing models—could affect the company’s goals and workers’ well-being. It discusses the details of implementation as well as the intended (and unintended) consequences of the internal match system. The case concludes with a debate about how the Chameleon marketplace could expand to include more Googlers and illustrates what to consider when thinking about launching new matching markets in organizations."

"Kuehn and her team launched the Chameleon program at the end of 2015 to optimize employees’ careers and Google’s business needs. Unlike most internal staffing paradigms, Chameleon did not rely on a central HR coordinator to assign the unit’s hundreds of individual contributors (ICs) to roles in its dozens of teams. Nor did Chameleon rely on self-initiated transfers, nor ad hoc, centrally planned reorganizations.

"Instead, under Chameleon, a staffing marketplace would open up three times during the year. At the start of each round, ICs would use Chameleon’s online platform to submit private rankings of the available roles. In turn, the ICs would be ranked by the manager responsible for each open role. The Chameleon platform would then turn these rankings into matches using a simple but robust marketplace algorithm, assigning ICs to roles for the next 6–18 months."
*******
Not a spoiler: It's a deferred acceptance algorithm...

A big role is played by a pseudonymous Googler who the case calls Bradford Preston, who was familiar with the market design literature and who "moved to a part-time role so that he could begin a PhD in economics."

There's much more, about getting this kind of internal marketplace adopted. And apparently new Googlers are called Nooglers.

Game theory post docs at the Technion

Ido Erev sends the following announcement

Post-Doc Positions
The Game Theory Group at the Technion is inviting applications for fully funded postdoctoral positions in Game Theory (broadly defined).

As a postdoc at our group, you will work with a varied team comprised of both leading researchers and young, highly motivated colleagues, all of whom are passionate about topics at the intersection of computer science, economics, operations research, and game theory. 

Requirements:  (1) A PhD degree obtained between October 1, 2015 and September 30, 2020. (2) Evidence of successful research accomplishments (discipline dependent; e.g., in CS, such evidence would usually be publications at top-tier conferences).

If you fit this profile and are passionate about an academic research career path, we would love to hear from you. Women are particularly encouraged to apply.

Applications will be considered on a rolling basis until positions are filled. The exact starting date is flexible/negotiable. Positions are for 1 year and are renewable for up to 3 years. There are no teaching duties (in some cases, compensation for performing additional teaching duties may be arranged). Further information is available online at: https://gametheory.net.technion.ac.il 

Applications should be addressed to GameTheory@technion.ac.il and should include:
1. a)    CV
2. b)    One representing research paper (possibly published)
3. c)    A short research statement (no more than 200 words)
4. d)    3 recommendation letters (please ask for these to be sent directly to GameTheory@technion.ac.il)

Typically post-doctoral scholarships range from $25,000 to $40,000 per year and carry no teaching duties. Note that scholarship income is not taxed in Israel and this may apply to non-residents through tax treaties. Also, the cost of living in Haifa is comparatively low. For example, the monthly rental of a one/two bedroom apartment in Haifa costs around $500-$800. For general information about doing a postdoc at the Technion, visit the Technion International School.
**********

My two cents: Haifa is a very agreeable city, and Ido Erev is one of the most exciting scientists I know...

Are we discarding too many deceased donor kidneys in the U.S.? A comparison from France, in JAMA

Here's a recent article from JAMA, that several people have brought to my attention over the last year as it has wended its way to publication:

Disparities in Acceptance of Deceased Donor Kidneys Between the United States and France and Estimated Effects of Increased US Acceptance
by
Olivier Aubert, MD, PhD1,2; Peter P. Reese, MD1,3,4; Benoit Audry, PhD5; Yassine Bouatou, MD, PhD1,6; Marc Raynaud, MSc1; Denis Viglietti, MD1,6; Christophe Legendre, MD1,2; Denis Glotz, MD, PhD1,6; Jean-Phillipe Empana, MD, PhD1; Xavier Jouven, MD, PhD1; Carmen Lefaucheur, MD, PhD1,6; Christian Jacquelinet, MD, PhD5,7; Alexandre Loupy, MD, PhD1,2

Abstract

Importance  Approximately 3500 donated kidneys are discarded in the United States each year, drawing concern from Medicare and advocacy groups.

Objective  To estimate the effects of more aggressive allograft acceptance practices on the donor pool and allograft survival for the population of US wait-listed kidney transplant candidates.

Design, Setting, and Participants  A nationwide study using validated registries from the United States and France comprising comprehensive cohorts of deceased donors with organs offered to kidney transplant centers between January 1, 2004, and December 31, 2014. Data were analyzed between September 1, 2018, and April 5, 2019.

Main Outcomes and Measures  The primary outcome was kidney allograft discard. The secondary outcome was allograft failure after transplantation. We used logistic regression to model organ acceptance and discard practices in both countries. We then quantified using computer simulation models the number of kidneys discarded in the United States that a more aggressive system would have instead used for transplantation. Finally, based on actual survival data, we quantified the additional years of allograft life that a redesigned US system would have saved.

Findings  In the United States, 156 089 kidneys were recovered from deceased donors between 2004 and 2014, of which 128 102 were transplanted, and 27 987 (17.9%) were discarded. In France, among the 29 984 kidneys recovered between 2004 and 2014, 27 252 were transplanted, and 2732 (9.1%, P < .001 vs United States) were discarded. The mean (SD) age of kidneys transplanted in the United States was 36.51 (17.02) years vs 50.91 (17.34) years in France (P < .001). Kidney quality showed little change in the United States over time (mean [SD] kidney donor risk index [KDRI], 1.30 [0.48] in 2004 vs 1.32 [0.46] in 2014), whereas a steadily rising KDRI in France reflected a temporal trend of more aggressive organ use (mean [SD] KDRI, 1.37 [0.47] in 2004 vs 1.74 [0.72] in 2014; P < .001). We applied the French-based allocation model to the population of US deceased donor kidneys and found that 17 435 (62%) of kidneys discarded in the United States would have instead been transplanted under the French system. We further determined that a redesigned system with more aggressive organ acceptance practices would generate an additional 132 445 allograft life-years in the United States over the 10-year observation period.

Conclusions and Relevance  Greater acceptance of kidneys from deceased donors who are older and have more comorbidities could provide major survival benefits to the population of US wait-listed patients.

The Iranian kidney market in Mashhad, by Mehdi Feizi and Tannaz Moeindarbari in Clinical Transplantation

Here's a new article in Clinical Transplantation:

Characteristics of kidney donors and recipients in Iranian kidney market: Evidence from Mashhad
Mehdi Feizi  Tannaz Moeindarbari
First published: 06 August 2019 https://doi.org/10.1111/ctr.13650

Abstract: The Iranian model of kidney transplantation is an example of a regulated living unrelated renal donation. In this paper, we collected and analyzed a unique dataset of 436 paired kidney donors and recipients, including their characteristics and the realized price of a kidney in Mashhad. As opposed to the global picture of kidney donation, we find that women are less likely to donate and more likely to receive a kidney. Moreover, the average price of a kidney amounts less than 2 years of work with the minimum level of wage.
***********

The article elicited a commentary by Gabe Danovitch, an eminent nephrologist at UCLA who speaks and writes frequently in opposition to compensation for donors:

COMMENTARY
Financial neutrality should replace the Iranian paid donor market
Gabriel Danovitch
First published: 16 July 2019 https://doi.org/10.1111/ctr.13665

He explains his opposition to markets in general this way: "the term “regulated market” is oxymoronic with respect to markets in general and specifically when it comes to human organs..."

(One wonders how the market for nephrologists works, and for medical specialists and subspecialists generally.  Someone should study that...)
**********

The article on Mashhad includes some very interesting description of the market there:

"Since the first live kidney transplant in Mashhad on 2 April 1985 until December 2017, more than 2500 people have had a kidney transplant in the Montaserie Organ Transplantation Hospital. It is operating as a center for dialysis and the only center in Mashhad and neighboring regions for transplantation of kidney, liver, and bone marrow. According to the latest reports, more than 7000 people from different age groups are now waiting for a kidney in Mashhad.

"In Mashhad, approximately 60 individuals refer to the IKF every week to sell their kidney. Of these donors, about 15 individuals are actively pursuing the process, while the rest are dissuaded due to various reasons. Out of these individuals, about one‐fifth are medically approved for kidney donation, after the 3 or 4 weeks of examinations.

"From the demand perspective, every end stage renal disease (ESRD) patient aged below 70 in Khorasan Razavi Province without having a willing related donor is referred through a nephrologist's letter to the IKF in Mashhad to enter the kidney waiting list according to their blood type. These patients can be entered in the waiting list of hospitals to receive a kidney from a deceased donor as well.

"From the supply perspective, each potential kidney donor, between 22 and 40 years old, should register at the IKF after undergoing the preliminary medical tests and bringing the notarized consent of him/herself and his/her family, including both parents for singles, only the spouse for married men, and the spouse and both parents for married women.
...
There are four different matching lines for each blood type, and the IKF usually pair each donor with a renal patient with the matching blood type in the waiting list based on a first come, first‐served basis. Nevertheless, this is not the only way of matching, and both sides can also publically advertise and find each other outside the IKF matching system. However, they have to register there and do the required paperwork and medical tests, as the transplantation centers only accept donors referred by the IKF, as a market maker.

"A renal patient should pledge in cash half the official price of a kidney to the IKF following the initial registration of the waiting list. Once a patient is matched to a donor and they both agree upon a price, the patient pays the remaining price of a kidney to the IKF via a cheque. After carrying out the transplantation, the IKF transfers all the amount of money received from the patient to the donor. However, the IKF neither receives any financial interest nor benefits from any monetary transactions, as it is a charity after all. Although there is no official ceil price, the IKF in Mashhad informally tries its best to convince and incentivize the donor not to ask a high price.
...
"Almost all kidney donors mostly face severe and urgent financial needs, for example, paying off debts (especially home rentals and blood money) and even living expenses, especially for single‐mother households. Thus, financial issues constitute the most frequent and primary motive for living unrelated donors in Iran.
...
"According to this law, compensated kidney donation in Iran is only possible between two individuals from the same nationality with the legal residence permits, especially refugees in Iran from Afghanistan.

"Since there is a large number of Afghan refugees in Mashhad, the IKF has formed a limited market for them. At the main kidney market for Iranians, donors do not have to wait to find a match, as there are always patients looking for a compatible kidney, especially those with a rare blood type such as AB. However, at the kidney market for Afghans, there is no patient in a queue to get a kidney and donors have to stay on the waiting list to find a suitable recipient.

"Moreover, for Afghan citizens, the amount of money a patient should pay to compensate a donor is determined not based on the official price of a kidney in Iran, but rather in a wholly agreed manner. In 2014, the total cost of kidney transplantation was about 6329 USD. While the government pays all kidney transplantation costs for Iranian patients and donors, Afghan renal patients should pay the hospital fees and other costs related to transplantation, which is estimated about 350 million IRR, almost 8650 USD, and reaches about 800 million IRR, almost 19 775 USD, with the cost of kidney purchase.
...
[Among Iranians] "Not only donors tend to be financially motivated for donation, but also recipients are not wealthy, as 47% of them are unemployed."

Drug wars and drug addiction, black markets and homelessness, in Seattle and elsewhere

This is the third of three posts on the twin problems of trying to reduce drug addiction and to reduce large-scale incarceration as the primary response to addiction.  

In my post yesterday, among the sentences I excerpted from Nicholas Kristof's NY Times column entitled Seattle Has Figured Out How to End the War on Drugs were these: "As I see it, the problem is that while Seattle has done an outstanding job halting the war on drugs, it hasn’t done well in financing the war on addiction. It closed the law enforcement toolbox without fully opening the public health toolbox."

Following his article, lots of the online comments pointed out that drug addiction, related crime, and homelessness has remained very visible in Seattle.  Some of the letters point to a video called “Seattle is Dying”.

Which brings me back to my post on Friday, which I titled

Clean needle exchange programs may be both helpful and harmful, which briefly reported on a recent NBER paper by Analisa Packham. on the effect of syringe exchange programs (SEPs). 

She concludes "I find that SEP openings decrease HIV diagnoses by up to 18.2 percent. However, I present new evidence that SEPs increase rates of opioid-related mortality and hospitalizations"

So... the headline to Kristof's piece is overly optimistic.  Drug addiction and its collateral damage are a giant problem, that we don't now how to solve.  It seems to me (in cases like this more generally) that experimentation is in order. We have a pretty good idea about some things that haven't worked very well, and we need to find policies that work better  Persistent black markets (which have survived decades of war on drugs) make clear that criminalizing markets needn't succeed in making them go away.  Nor does simply de-criminalizing them.

I anticipate that dealing with addictive drugs will be one of the important market design issues of the next decades.

Fighting addiction in Seattle, where incarceration isn't the treatment of choice

Here's Kristof in yesterday's NY Times:

Seattle Has Figured Out How to End the War on Drugs
While other cities are jailing drug users, Seattle has found another way.

"SEATTLE — On gritty streets where heroin, fentanyl and meth stride like Death Eaters, where for decades both drugs and the war on drugs have wrecked lives, the city of Seattle is pioneering a bold approach to narcotics that should be a model for America.

"Anyone caught here with a small amount of drugs — even heroin — isn’t typically prosecuted. Instead, that person is steered toward social services to get help.

"This model is becoming the consensus preference among public health experts in the U.S. and abroad. Still, it shocks many Americans to see no criminal penalty for using drugs illegally, so it takes courage and vision to adopt this approach: a partial retreat in the war on drugs coupled with a stepped-up campaign against addiction.

"The war on drugs has been one of America’s most grievous mistakes, resulting in as many citizens with arrest records as with college diplomas. At last count, an American was arrested for drug possession every 25 seconds, yet the mass incarceration this leads to has not turned the tide on narcotics.
...
"In effect, Seattle is decriminalizing the use of hard drugs. It is relying less on the criminal justice toolbox to deal with hard drugs and more on the public health toolbox.
...
"As I see it, the problem is that while Seattle has done an outstanding job halting the war on drugs, it hasn’t done well in financing the war on addiction. It closed the law enforcement toolbox without fully opening the public health toolbox.

"Local officials found that in a world of competing budget silos, money saved from jails can’t easily be reallocated to treatment. This is so even though researchers repeatedly find that drug treatment pays for itself by saving huge amounts of taxpayer money, not to mention lives. One study found that substance abuse treatment in California paid for itself seven times over in reduced crime and other savings.

Clean needle exchange programs may be both helpful and harmful

Here's a recent NBER working paper that looks at the effects of opening a place where intravenous drug users can get clean needles--it finds that this reduces blood borne disease, but may in fact increase drug use.

Are Syringe Exchange Programs Helpful or Harmful? New Evidence in the Wake of the Opioid Epidemic
by Analisa Packham
NBER Working Paper No. 26111,  July 2019

Abstract: "In light of the recent opioid crisis, many public health entities have called for an expansion in syringe exchange programs (SEPs), which provide access to sterile syringes and facilitate safe needle disposal for injection drug users. This paper investigates the effects of recent SEP openings on HIV diagnoses and drug-related overdoses in the wake of the opioid crisis. I find that SEP openings decrease HIV diagnoses by up to 18.2 percent. However, I present new evidence that SEPs increase rates of opioid-related mortality and hospitalizations, suggesting that needle exchanges alone may be less effective than other interventions at stimulating recovery."


"From an economic standpoint,SEPs have the potential to create large positive externalities by reducing the stock of used needles on the streets and preventing the spread of disease. Conversely, by providing clean needles to drug users, reducing the stigma of using drugs and/or creating a safe environment for networking with other users, SEPs may also generate untended consequences. In particular, lowering the cost of obtaining needles and other supplies incentivizes drug users to inject more frequently, potentially exacerbating rates of opioid misuse and abuse. 

"In this paper, I test the causal relationships between SEP openings and drug-related health and crime outcomes. Because no official national directory of SEPs exist, I construct a hand collected dataset on program locations and opening dates to identify areas exposed to SEPs within the last ten years. In particular, using health outcomes data from the CDC, I compare rates of HIV, drug- and opioid-related deaths, opioid-related overdoses, and drug-related crime in counties with SEP openings to other counties without SEPs before and after the initial year of implementation. I find that SEPs decrease the number of HIV cases in some areas, and that  this effect grows over time. However, estimates also indicate that SEP openings increase drug-related mortality. … Effects are largest in rural and high-poverty areas, suggesting that those with larger geographic or financial obstacles  to substance abuse treatment are most affected by such programs."