Thursday, December 14, 2006

Defaults and donations

It's been a news-heavy week on the personal front, but I'm attempting to get back into some kind of routine, which would include catching up with my reading (a futile task) and blogging more regularly.

Here's just a small thought I've been pondering: How can we encourage individuals to commit to donating, including the donation of their money to charity, or the donation of their organs when they die? Maybe we shouldn't. (edit: At least not on an individual level).

First, consider organ donation.

The Edmonton Journal reports, “Health Canada has identified a shortage of organ donors in Canada, noting Canada has one of the lowest rates of organ donation in the industrialized world.”

Consider the ways we can encourage organ donation.

The government can commit to ad campaigns to attract the so-called "altruistic donor." It could also offer a tax deduction of, say, $5,000 or $10,000 off the estate of an organ donator.

The first option can be costly and ineffective. And, a tax deduction? Well, I happen to think that there shouldn't be an estate tax, so I'm not quite on par with this solution either.

Then there are financial incentives beyond tax deduction. Alex Tabarrok explains (2004):

In the minds of many, financial incentives for organ donation means rich people buying up kidneys being hawked on eBay by the desperately poor...Two distinctions are especially important. First, financial compensation for cadaveric donation and for living donation are different ideas and it is quite possible to have one without the other. Indeed, the primary cause of so-called organ tourism—rich people flying to poor countries like India to undergo a transplant from a poor, living donor—is the shortage of organs in the West. By allowing compensation for cadaveric donations we’ll increase the domestic supply and reduce the demand for people to fly to poorer countries for living donation. Financial compensation for cadaveric donation, in other words, is a substitute for both paid and unpaid living donation.

Second, organs are currently allocated according to a point system which is based on factors such as the quality of the match between donor and recipient, the length of time the potential recipient has been on the waiting list, the health of the potential recipient and so forth. It is not necessary to change these criteria in order to make use of financial compensation. Financial incentives can be used to increase the supply of organs without using finance to determine who will receive an organ.

The solution that has my attention is this: change the default. Andrew from “Statistical Modeling, Causal Inference, and Social Science” explains:

Over 99% of Austrians and only 12% of Gernans consent to donate their organs after death. Are Austrians so much nicer than Germans? Maybe so, but a clue is that Austria has a "presumed consent" rule (the default is to donate) and Germany has an "explicit consent" rule (the default is to not donate). Johnson and Goldstein find huge effects of the default in organ donations, and others have found such default effects elsewhere.

What does this have to do with financial charity donations? Andrew goes on:

Lots of research shows that people are likely to take the default option (see here and here for some thoughts on the topic). The clearest examples are pension plans and organ donations, both of which show lots of variation and also show people's decisions strongly tracking the default options.

....My hypothesis, then, is that the groups that give more to charity, and that give more blood, have defaults that more strongly favor this giving. Such defaults are generally implicit (excepting situations such as religions that require tithing), but to the extent that the U.S. has different "subcultures," they could be real. We actually might be able to learn more about this with our new GSS questions, where we ask people how many Democrats and Republicans they know (in addition to asking their own political preferences).

Does this explanation add anything, or am I just pushing things back from "why to people vary in how much they give" to "why is there variation in defaults"? I think something is gained, actually, partly because, to the extent the default story is true, one could perhaps increase giving by working on the defaults, rather than trying directly to make people nicer. Just as, for organ donation, it would probably be more effective to change the default rather than to try to convince people individually, based on current defaults.

I'm not quite sure how changing a default would work with regards to giving money to charity, or giving blood, without infringing on people's freedoms (I don't consider Austria's "presumed consent" rule to be such an infringment), but I like how Andrew is thinking and I'll be pondering his idea more.


amphimacer said...

As to the charitable donation, I haven't got much to say, since my own giving seems to be unlike anyone else I know, because of my own particular views on giving, but I'll point you to this review (in the London Review of Books) of a recent book on organ donations that seems useful in discussing the matter (as the book itself would no doubt be):

true dough said...

Thanks for the link. This is getting ugly. The poor family of the 9-year-old girl, right? You've emphasized the aspect of the default idea that bothers me most: the intrusion on people's freedoms. But I'm still debating the default idea.

Here's a thought: We can set up some sort of second-degree discrimination. I'll explain. Say, the first time you give blood, or the first time you apply for a charitable tax refund, your default is adjusted so that you're henceforth a committed organ door (unless you suggest otherwise). It's almost a self-selection process.

Although, it has it's drawbacks (eg. admin fees; and we still have to encourage people to engage in an initial charitable act).

amphimacer said...

I'm not at all sure that giving blood or money has much in common with organ donation. Here's my personal take on the matter:

I give money (to be quite specific) to service organizations like the MS Society, or to cultural organizations like the Stratford Festival, because their aims are aims I support, and I think that the organizations I am helping to fund are using my money appropriately. I have the incentive of tax reduction, so that every fifteen dollars I give costs me only around ten dollars, and the organizations provide the incentive of making my world a better place. But this financial sacrifice has little emotional component. Blood is the same, in a way, since when I give blood it costs me only a little time and pain (not discomfort -- my arm actually hurts for six to eight days afterwards, and the bruising takes about two weeks to finally disappear). My body replenishes the blood, and I am no poorer for having donated.

But organs are another matter. First, there's the matter of the family thinking that their loved one is somehow no longer whole. Then there are religious considerations, particularly for those who believe in a resurrection of the flesh -- which is, by the way, both Christian and Jewish belief, fundamentally; Heaven and Hell are comparatively late interpolations in the record of both. There's also the thinking about when death occurs -- if the organs are still functioning, some people are surely thinking, then there is still life. That's why the brain-dead definition of death was not that easy a sell.

But my instructions to my wife and daughter are simply that once I'm dead, they can do whatever they like, as long as they don't have a motorcade to the cemetery that holds up traffic; I assured them that I will not be in a hurry.

Will assumed consent help to increase the number of organ donations? Of course. But there will be a social cost, because some people who didn't think about it will think about it afterwards, and be upset. That in its turn will have a further cost, in court time, and in other ways. A society that goes that way will need to be comfortable as a society with that decision, and I'm not at all sure that we in North America will feel all that comfortable.

true dough said...

You're right. The second-degree discrimination idea sucks. After some thought, I consign the entire shifting-of-the-default idea to the trash.

It's just unfortunate that so many Canadians die due to the absence of an organ donor, meanwhile we sit like lame ducks because market solutions, default-shifting etc is too controversial. I guess the Malthusian side of the coin is that death is not unfortunate; it's natural.