Thursday 1 April 2010

A wise investment

The best evidence suggests intelligence is highly heritable. So appropriate choice of spouse is the most important thing you can do for your future children.

But if fertility problems mean that you then need to turn to the gamete market, there's apparently a thickish, albeit somewhat illicit, market in high-IQ gametes.
The Harvard Crimson was one of three college newspapers that ran an identical classified ad seeking a woman who fit a narrow profile: younger than 29 with a GPA over 3.5 and an SAT score over 1,400. The lucky candidate stood to collect $35,000 if she donated her eggs for harvesting.

The ad was one of 105 college newspaper ads examined by a Georgia Institute of Technology researcher who issued a report yesterday that appeared to confirm the long-held suspicion that couples who are unable to have children of their own are willing to pay more for reproductive help from someone smart. The analysis showed that higher payments offered to egg donors correlated with higher SAT scores.

“Holding all else equal, an increase of 100 SAT points in the score of a typical incoming student increased the compensation offered to oocyte donors at that college or university by $2,350,’’ wrote researcher Aaron D. Levine.
Cheap at twice the price. But still officially discouraged by the American Society for Reproductive Medicine.
The Hastings Center Report, published six times a year, explores ethical, legal, and social issues in medicine, health care, public health, and the life sciences. The issue of the report containing Levine’s analysis also offers a counterperspective from John A. Robertson, who chaired the ethics committee of the American Society of Reproductive Medicine. He casts doubt on the notion that it is an ethical problem to pay more for eggs from a woman with a particular ethnic background or high IQ.

“After all, we allow individuals to choose their mates and sperm donors on the basis of such characteristics,’ Robertson wrote. “Why not choose egg donors similarly?’’
Indeed! Or should we move to force arranged marriages with random draw selection?

Note of course that egg extraction isn't an easy process for the donor: lots of time and hassle are involved. At fixed rate payment, what does that do to the pool of potential donors? Selects for the ones with the lowest opportunity costs of their time! Differential payments are required to bring higher quality donors into the market.

You might expect this to mean that the variance of payments for egg donors than for sperm donors. But recall of course that male donors face higher expected legal risks: there's a non-trivial chance that either legislatures or courts will make donors liable for child support payments, or that anonymity would be breached such that suasion could be used to extract resources down the line. Both of these risks increase with donor income and income is increasing in IQ. Nevertheless, price dispersion seems relatively low for male donors: a PhD donor's product retails for $40 more than the standard product; the standard product sells for $125 more than the "well, we have this stuff left over from a while back" product.

It's surprising that there's any market at all for the lower-tier male product given the very low price dispersion. I mean, who'd say "Nah, the extra $165 to go from bargain basement to PhD just seems too high; I'd sooner a slightly better iPod than a kid with an expected IQ increase of maybe 30 points." Are the lower tiers just there to make the upper tier look cheaper by comparison?

Obvious disclaimer: no involvement on any side of this market, academic interest...

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