Given the current cost of funerals, the savings from donating bodies to medical schools can be substantial. This is especially true in states with funeral industry--protective regulations that are intended to keep out low-cost competitors. Those states provide us an opportunity to test empirically the effects of compensation on whole-body donation and, in turn, to extrapolate whether there is any merit to the criticisms of organ donation compensation.

If potential whole body donors respond to financial incentives, then we ought to see more body donations in stringently regulated states where funeral prices are higher. That is, in fact, what the data show. The number of body donations in stringently regulated states is 7.6 bodies per thousand deaths and only 3.2 bodies per thousand in unregulated states. This is powerful evidence that people react to financial incentives in making whole body donation decisions. We estimate that high funeral prices in the 38 states with stringent funeral regulations increase the number of donations by 8,400 bodies per year. It stands to reason that financial incentives would also raise the donation of transplant organs.

The IOM's rejection of such proposals rests on the argument that offering modest compensation would be perceived by organ donors as sullying their gift. But the empirical data on whole body donation discredit the IOM's argument; the families of whole-body donors often proudly highlight their gifts in obituaries, despite their receiving the financial benefit of not having to pay for a funeral.