This article is from the archives of the UB Reporter.

Unorthodox ideas for economics

New faculty member Julio Elias looks for policy implications of economic problems

Published: December 8, 2005

Reporter Contributor

When Julio Elias and his dissertation advisor, Nobel laureate Gary Becker of the University of Chicago, presented their research, they didn't go to a conference of economists or other social scientists. Instead, they took their ideas—which centered on the possibilities for a market for human organs—directly to a group of physicians.


Julio Elias considers University of Chicago economist and Nobel laureate Gary Becker his mentor and greatest influence. Elias says the University of Chicago economics faculty is known for its application of economics to unorthodox topics, such as organ donation.

"Some of them actually were favorable to the idea—a few," Elias recalls. "Most of them—they didn't have a good reaction."

Elias, a native of Argentina who studied economics at the University of Chicago, had some experience with unorthodox applications of economics and the way non-economists react even before the physicians' conference. In addition to his work with Becker, he also had the opportunity to take courses taught by Chicago's Steven Levitt, who became somewhat well known earlier this year with the publication of "Freakonomics: A Rogue Economist Explores the Hidden Side of Everything."

In the organ market paper, Becker and Elias evaluated the introduction of monetary incentives in the market for organ donations, from both cadavers and live humans.

"We showed that organ transplants could increase by a huge amount at a very low cost," Elias says. "Of course, there are moral objections to our theory, but we don't think these moral objections are valid. At the same time, we are discussing these moral topics, people are waiting for an organ and their health is becoming worse and worse."

This summer, Levitt came under similar criticism when anti-abortion activists noticed that his book attributes the drop in the U.S. crime rate since the 1990s to the advent of legalized abortion after Roe v. Wade. Part of Levitt's argument was that crime began to drop sooner in New York, where abortion became legal a few years before the Roe decision, than it did in the rest of the country.

Becker, Elias's mentor and greatest influence, also has come under criticism for his work, which applies economics to unconventional topics, of which organ donations was far from the first. He won his Nobel Prize in 1992 for extending economic theory to a wide range of behavior and human interaction. Becker believes that people behave according to the same general principles, whether making economic or non-economic decisions, and that non-economic decisions are more rational than others might suspect.

"The topics that I'm interested in now are hugely influenced by my advisor, Gary Becker," Elias notes. "I think (the University of) Chicago is known as a place where we apply economics in any area."

Elias's research focuses on labor economics, economics of education, economic development and health economics. He wrote his dissertation on the effects of education on those who come from advantaged and disadvantaged circumstances, finding that education had a greater proportional non-monetary benefit for people who came from poverty or difficult family situations, or were classified as "low ability."

Even when the better-educated, impoverished subjects in the study did not go on to greatly increase their earnings, criminal behavior declined significantly. From a social point of view, since the reductions in criminal behavior are larger among less-able people and those with a poor family background, these results cast some doubt on policy proposals that, for efficiency, advocate investing more in those who are more able, he says.

"What I try to do is to analyze, to understand economic problems, but most importantly, to try to see the policy implications," he explains.

Elias also has worked to analyze the relationship between health and education levels, unemployment and the marriage rate, and wage inequality in Argentina.

"Here at the (UB) economics department, we have a great environment for research," he says. "I find that the university provides us with most things we need, and they allow us to concentrate on research."

In addition to his research, Elias teaches courses on microeconomics to both undergraduate and graduate students.

"I think things are going very well. I'm happy with the experience here," he says.

Elias and his wife, Soledad, live in East Amherst with their 2-year-old daughter, Ana. His wife hails from Buenos Aires, while he's from Tucuman, a smaller urban area in the northwestern part of the country. From their home, she runs the Web page of her family's business back home in Argentina.

"We are really happy. It's a great place to live, in particular for a family," he says of the Buffalo area. "It's a great place to raise kids. We live in a quiet area with a lot of parks surrounding it. And also the shopping is good. You have both."