The US is a world leader in sperm exports primarily because sperm banks in the U.S. are run on a for-profit basis. As a result, US sperm is reckoned to be of high quality (we always knew this didn’t we?) particulary because the US version comes with a background on the vitals of the donor. Denmark also exports a lot of sperm because of high standards and demand for that blond, blue-eyed look.

Exports to Canada have increased in recent years because of a scandal involving poorly screened Canadian sperm. Canadians also import a lot of US eggs. The Canadian government, however, is apparently miffed as a new law is being readied that would forbid donations involving a paid donor. The law would not only make paid donation illegal in Canada it would make it illegal to use any paid-for sperm. Canadian couples seeking fertility options will suffer and who will benefit? I cannot think that this law is anything but spiteful and ridiculous. Is paying for sperm an original sin? As with other areas of Canadian medicine (see Tyler’s posts here and here), the rich will now travel to the United States for treatment.

Aside: The Canadian Health Official quoted here is ignorant or disengeneous when she says “We don’t buy or sell blood, or organs or tissues.” In fact, Canada also imports a lot of US blood plasma. Plasma takes longer to donate than straight blood and as a result altruistic donation rates are low and much of the world relies on paid-for US plasma for its life-saving properties. Similarly, donating eggs is not nearly as much fun as donating sperm so altruistic donation of Canadian eggs is unlikely to make-up for restrictions on the import of paid-for US eggs.

Thanks to Eric Crampton for the seminal email.

I don’t aim to be the cynical economist that Tyler writes “might suggest social stigma for suicide, rather than forgiveness” but it is frightening how easy it seems to be to jump to the sad equilibrium. The story of suicide among young boys in Micronesia (I recommend Malcolm Gladwell’s The Tipping Point for a discussion but will cite some online material) illustrates how actions and social attitudes reinforce one another. As the action becomes more common, perhaps reaching a “tipping point”, condemnation declines, and the action increases even further. Here, from one of the researchers who first documented the story, is a chilling description of suicide in Micronesia:

As suicide has gained familiarity among youth, the act itself has become increasingly more acceptable or even expected. Suicides appear to acquire a sort of contagious power. One suicide might serve as the model for successive suicides among friends of the first victim. There has been an apparent increase in suicides among very young children, aged １０-１４. Evidently the idea of suicide has become increasingly commonplace and compelling, and young children are now acquiring this idea at earlier ages.

Another of the earlier researchers writes:

Love songs mention suicide, youths discuss the subject openly among themselves and at times make suicide pacts with one another, and youngsters express admiration of those who have taken their own lives and are mourned so terribly by their families and friends. What is even more shocking, however, is that a number of adults in our communities seem to share the belief that these young people have died altruistic and even heroic deaths. If the majority of Micronesians really believe that suicide is an honorable option, then this paper is thoroughly useless and all of us had better resign ourselves to continuing high rates of suicide in the future. Young people, after all, are very quick in sensing the basic values of their elders. If they get the impression that we ourselves honor suicide, then they will be only too happy to oblige by hanging themselves.

Note that one could tell similar stories in the United States about divorce, having children out of wedlock, welfare dependence etc. (also teenage suicide at a local level).

Here is a graph of suicide rates in Micronesia indicating a massive increase in a few short years in the early 1970s. The tipping theory generates credence when we note that virtually all the suicides take a similar, ritualistic form involving hanging.

Tyler appears to be growing more skeptical of the value of health care spending (see his posts here and here). A simple model explains most of what is going on and why he and another of my very smart colleagues Robin Hanson, are wrong. In the graph below spending on health care is on the X axis, health outcomes are on the Y axis. Spending shows diminishing returns. We are currently at point Q on the graph labeled T1 – note that at this point marginal increases in spending have little effect on output (Tyler asks, What margin has low value? Answer: The marginal dollar). Even fairly large increases or decreases in spending will not change outcomes very much given that we are currently at point Q.

Why are we spending so much as to push us into the flat portion of the production function? One reason is that out-of-pocket expenses for medical care are much lower than true costs – we typically are spending someone else’s money. A second reason is that the marginal utility of wealth is low if you are dead so spending on health care near the end of life has unusually low opportunity cost. A third reason may be that various psychological factors make the desire to avoid regret particulary strong for health care, as Tyler speculated earlier.

Although the marginal dollar has low return the value of improvements in medical technology is enormous. These gains are illustrated by the shift from T1 to T2. It has been estimated, for example, that increases in life expectancy from reductions in mortality due to cardiovascular disease over 1970-1990 has been worth over $30 trillion dollars – yes, 30 trillion dollars (for this research see: book, papers, summary). A conservative estimate is that 1/3rd of these improvements in life expectancy were due to better medical technology. One third of the annual benefits is $500 billion – this is much more than total government spending on medical research (the budget of the entire NIH is around 25 billion).

The low value of medical spending at a particular point in time and the high value of medical research over time suggest that we would be much better off if we cut back on medical care spending and devoted the funds to medical research. We should spend less on Medicaid, Medicare, Prescription drug plans etc. and use the savings to better fund the NIH (or other methods of increasing medical research such as prizes etc.)