Price deflation and the underground organ economy in the Philippines

This is the first in-depth study of the illicit human organ trade in the Philippines. The question for analytical investigation is why the underground organ commerce thrives, despite meager support and compensation for commercial donors (or vendors).

Quantitative survey results were obtained from a probability sample of living Filipino kidney vendors (P = 0.95; α = 0.05). The kidney trade was studied because it has the highest level of demand among all tradeable human organs in the Philippines and globally.

The study finds that deflated vendor compensation, lower than global kidney purchase prices, and relative stability in kidney supply obtain from a combination of the socio-economic characteristics of Filipino vendors and the asymmetric information available to them. The high degree of ambiguity and continuity between legitimate organ donations and underground buy-and-sell operations poses major challenges to effective regulation and law enforcement on the part of the Philippine government.

Any reform effort will need to effectively address the fine distinction between two different but overlapping organ procurement markets, and brokered trading, with minimal transaction costs, based on asymmetric information. Policy lessons and insights from the Philippine experience that are transferable to other countries, particularly in the developing world, are noted in this study.