September 2016

IZA DP No. 10187: Efficiency-Morality Trade-Offs in Repugnant Transactions: A Choice Experiment

revised version published as 'Paying for Kidneys? A Randomized Survey and Choice Experiment' in: American Economic Review, 2019, 109 (8), 2855 - 2888

Societies prohibit many transactions considered morally repugnant, although potentially efficiency-enhancing. We conducted an online choice experiment to characterize preferences for the morality and efficiency of payments to kidney donors. Preferences were heterogeneous, ranging from deontological to strongly consequentialist; the median respondent would support payments by a public agency if they increased the annual kidney supply by six percentage points, and private transactions for a thirty percentage-point increase. Fairness concerns drive this difference. Our findings suggest that cost-benefit considerations affect the acceptance of morally controversial transactions, and imply that trial studies of the effects of payments would inform the public debate.