Role Of The Default Bias In Organ Donation Rates

The first law of motion, also known as the law of inertia by Newton goes like this: A body in motion remains in motion or, if at rest, remains at rest at a constant velocity unless acted on by an external force. If one thought inertia was only confined to the walls of physics, behavioral economics asks them to think again. Here I’d like to introduce the reader to the concept of cognitive bias – an organized and consistent pattern of deviation from rationality in judgment which may sometimes lead to inaccurate understanding, perceptual distortion and illogical interpretation, all of which can be clubbed as “irrational” behavior (Kahneman & Tversky, 1972). One such cognitive bias is the default or the status quo bias.

It is an emotional bias or a preference for ongoing circumstances and positions. Richard Thaler and Cass Sunstein (2008) define defaults as “pre-set courses of action that take effect if nothing is specified by the decision maker”. Samson (2014) regards defaults as effective tools in choice making process especially where there is uncertainty involved in decision making.  In simple words, this bias suggests that people are more likely to choose the default option. For example, majority of human beings stick to the religion they are born with rather than changing it; majority stay with “Google” which is a default choice of web browser; WHO Africa showed that in African nations where H.I.V. test has become a part of regular prenatal tests unless opted out by the women, have shown huge surge in % tested after the policy change.  The reasons for such a bias can be laziness, discomfort in making a decision, loss aversion (Tversky, 1972) where risk of incurring a loss is perceived to happen in case the non-default decision shows poor outcomes or as the saying goes…”If in doubt, don’t do anything”. What this means is, there is discomfort experienced in taking responsibility of a decision and its probable outcomes which is why there is a preference to stick to status quo. Few instances where introducing defaults have showed significant results are household savings (Chetty et al.,2012),  Charitable donations (Behavioural Insights Team, 2013), Reducing electronic waste (OECD, 2016), Retirement plan enrollment (Goda & Manchester, 2010) and increase in the rate of organ donation (Johnson & Goldstein, 2003).

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In this essay I’d be discussing the debate between opt-in and opt-out policy measures concerning organ donation, the various ethical and religious arguments of both viewpoints and a brief comparison of before and after statistics of countries that decided to use the default bias to increase the number of organ donations.

Organ Donation

The process of taking healthy tissues and organs from one person and transplanting them into another person/s is known as organ donation. The donor can be living or deceased. People of all ages can be donors. There are studies that show that organs of a donor can save the lives of up to 50 other people (National Institute of Health, USA).  Organs that can be donated are skin, cornea, bone and bone marrow as well as internal organs such as kidneys, liver, lungs, intestines, heart and pancreas to name a few. Deceased organ donation occurs after a person is brain dead and cannot breathe without external help. Brain dead persons cannot recover and hence are considered eligible to donate their organs. The transplantation is possible only if the organ is healthy and is medically suitable for the recipient.  There are some organs for example a kidney or part of a lung without which the donor can fully function. Donation of such organs when the donor is alive is called living organ donation, generally done by family members and close relations. According to the NIH, in 2012 against 90,000 people in the United States who needed new organs, there were only 17,000 transplants. U.S. Department of Health & Human Services data shows that 20 people die every day due to non-availability of organs. In India, about half a million or 5 lakh people died in 2017 due to the same reason. It is important to note here that in 2018, commercial trade of human organs is illegal in most countries of the world except Iran, however the market there is highly regulated by the state jurisdiction. With the above data, it is clear that demand for organs significantly exceeds its supply and this gap has led to increased health care expenses and deaths. This along with the fact that commercial trade is prohibited makes this a government responsibility to increase awareness towards organ donation as well as influence more and more people to opt for the same. Historically, all the countries had an “opt in” system where if an individual wanted to donate her organs, she would have to opt in. Lately, more and more countries are adopting an “opt out” system where the individual by default has opted for organ donation unless a specific request to refuse is made by her or next of kin. The countries adopting the latter have statistics that show improvement in the organ donation rates; however some economists think that a lot of other variables are also at play.

The debate

It is safe to say that technology and medical science have advanced tremendously and life expectancy rate of average human being is higher than ever before. Due to this, it is possible to save lives that are lost due to organ failure, by organ transplantation. Majority of governments today, thus understand the need of organ donations. Health sector is usually one of the top priorities of countries across the world and if organ transplantations can save lives without harming the donor, the logic is pretty straight forward. There is a concept in welfare economics called Pareto optimality or pareto efficiency. Pareto optimality suggests a state of allocation of resources in such a way that any redistribution of current allocation is impossible to make one individual better off without making at least one individual worse off.  Here the keyword is “allocation”. However, I would be focusing more on that in the next section.

The debate currently is regarding the use of status quo or default bias concerning the policy of organ donations and voluntary consent. Most countries use opt in, where an individual has to consciously decide and consent to be an organ donor, fill a few forms and put herself through the process of becoming a registered donor. Opt-out policy presumes consent i.e. the individual has already agreed and is a registered donor unless refused explicitly by the concerned individual or her next of kin. One would usually see such choices in driving license registration, medical insurance renewal, social security cards etc. More and more countries are changing their policy to opt-out. Currently there are 28 countries that have fully adopted the opt-out policy. In a comparative study published by Johnson & Goldstein (2003), they compare two culturally and economically similar European countries Austria and Germany. The former has an opt-out policy while the latter has opt-in. Their research concludes that Austria has a consent rate of 99.9% while Germany has a consent rate of less than 12%. The whole rationale behind using defaults is that people don’t actually have a problem with donating their organs, however because of laziness, loss aversion, inability to deal with taking decisions and other such reasons fail to go through the process of becoming a registered donor. More often than not, people like the idea of altruism and being able to help others by donating their organs, however when it comes to actually practicing it, they don’t necessarily do so. In a study conducted by United Kingdom’s National Health Service (NHS) in 2012, they found that 62% of the people surveyed were willing to donate their organs but only 31% converted to registrations. I would like to emphasize here that the debate only arises when majority of the concerned population doesn’t have any significant issues against organ donation, because only in such a scenario will an opt-out policy work.

Below figure graphically shows the organ donation rates in countries with opt-in and opt-out distinction based on 2014 data. Spain ranks the highest in the world with 36 donors per million population (pmp) with an opt-out system and Japan ranking the lowest with 0.7 donors pmp. Overall, we can see that countries with an opt-out system have higher rates of organ donation and are able to save more lives. Bilgel (2012) compared opt-in and opt-out countries and reported that on average opt-out countries have 18% higher donation rates than former. At this point, one might logically question that if an opt-out system is so glorious and life-saving, why aren’t all countries doing the same? Or why does such a debate even exist? For starters, there exist a lot of ethical and religious issues and more often than not there is a gap between donor rates and effective organ donation rates.Ethical arguments

The whole idea and practice of organ donation poses some unique ethical dilemmas. The point of including this section in the essay is that there are two ways to look at increasing donation rates – legislative and non-legislative. Legislative changes include policy change from opt-in to opt-out or vice versa. But evidence shows that some countries that follow opt-out policy have lower donation rates than opt-in for example Bulgaria and Luxemburg. There are a range of issues concerning this. Here, I’d be focusing on ethical and religious arguments.

The most important ethical dilemma is the problem of allocation. Currently, demand for organs is significantly higher than its supply. Also, because it is something that can save lives it becomes a scarce necessity good with no or very few close substitutes. Thus, comes the question, how to allocate this scarce resource. Should the organ be allocated to one who has done more for the society or someone who is a rich capitalist or the patient whose condition is more severe? In addition to this, who would actually make the allocation decision? In any case, problem of allocation is huge and can lead to crime, unrest and lack of trust in society. Today, in most countries, state is the only legal supplier and regulator of organs donated and computer network algorithms match donor’s organs to potential recipients. The criteria are severity of patient’s health condition, blood type, proportionate body size and distance. Distance is especially important because there are some organs which cannot survive for more than a few hours outside the donor body. When it comes to living donors, the doctors are supposed to take an organ or part of an organ from a living and healthy individual and risk her life to save the patient. The concerns here are, was the individual forced/coerced physically or psychologically to agree or does the donor feel any altruistic compulsion? Both of these situations make her unfit to become a donor legally. At present, the physicians and doctors have a responsibility to talk to the individual consenting to be a living donor, inform them about all the possible complications and prevent her if the chances of saving the recipient life are low. Living donors who are not family members or close friends raise some ethical doubts too such as compensation for psychological conditions like depression or anxiety, intention of getting close to the recipient or public exposure and fame. Willis and Quigley (2014) point out the arguments about how ethical is putting personal photos or notices as advertisements on bill boards and social media forums. In some countries before 1970’s, commercial trade of human organs was legal. India was one such country, however due to instances of exploitation, non-payments, forced organ removals and likes, it was prohibited under Transplantation of Human Organs Act, 1994. However a section of society exists that argue in favor of monetary incentives in lieu of organs. All such arguments are along the lines of “it should be my right to sell my organs, if I don’t have a problem, why does the government interfere”? Many policy makers too believe that monetary incentives would bring a huge surge in organ donations. However, because organs cannot be compared to other product and they involve risk of bodily harm, majority governments today are against its commercial trade.

Religious arguments

While no religion formally objects to organ donations and transplantations, there are many beliefs associated with God that prevents people from agreeing to become a donor. Some of them include the belief that human body is God’s gift and should not be meddled with, especially after death or if an individual donates an organ, she will be born without it in her next birth – this argument is majorly used in cornea donations, a lot of people feel that they will be blind in their next birth if they donated their eyes after death. There also exists a section of society where caste, community and religion are given a lot of importance. There are individuals who might not object to donating their organs however they object to donating it to people belonging to a lower caste or a different religion.

Catholic Pope John Paul II in 1991 said “There are many questions of an ethical, legal and social nature which need to be more deeply investigated. There are even shameful abuses which call for determined action on the part of medical association and donor societies, and especially of competent legislative bodies”. He also went on to say, “In effect, the human body is always a personal body, the body of a person. The body cannot be treated as a merely physical or biological entity, nor can its organs and tissues ever be used as item for sale or exchange” (St. International Congress of the Society for Organ Sharing).

There are also some myths surrounding organ donations. In India for example, there are many who believe that organ donation is an expensive procedure and it is them, the donors that will have to bear the expenses of the transplantation. To conclude, there is a serious lack of awareness within the people that leads to having superstitions and myths.

Has the default bias done all the magic?

Apart from legislative changes such as changing organ donation policy from opt-in to opt-out, there are a range of other non-legislative actions that countries like Spain, Austria, Belgium and a few others have implemented which are believed to be more significant variables that led to an increase in donation rates rather than the default bias.  The point I want to bring out is that while it is important to have donors, it is equally important to have an efficient infrastructure of procurement of organs and medical proficiency. For example, let’s look at Spain – the country with highest number of donors pmp in 2018. Matesanz R (2013) noted that Spain implemented the opt-out policy in 1979; however there is no reliable evidence of immediate post policy change.  Also, prior to that the medical science hadn’t advanced a lot and transplantations happened mostly in the bigger cities of Madrid and Barcelona. Thus, accurate before and after comparisons cannot be made. He also pointed out that only after 1990, did any significant change was seen. By then Spain had made some really profound organizational and structural changes such as provincial organ donation programme, founding Spanish National Transplant Organization (ONT), formal training of transplant coordinators, increase in number of specialty intensive care units (ICUs) and a nationwide media awareness campaign (Fabre, Murphy & Matesanz, 2010). Price (2011) identified that countries that tried to follow the Spanish model saw increased donation rates for example Australia, Italy, Uruguay and Argentina. Tuscany is the most interesting example where before even making the policy change to opt-out, they experienced a huge surge in registered donors by implementing Spain’s non-legislative model (Simini, 2000).

If we take India’s example, approximately 5 lakh people die every year due to unavailability of organs. In a country of 1.3 billion population, there are only 301 hospitals that can perform organ transplantations. These hospitals are usually in the bigger cities whereas majority population of the country still lives in rural and semi urban areas. There is also a serious lack of education and awareness even in the medical sector for example ability to identify a brain dead patient and how to attend a brain dead patient; process of organ donation and transplantation. According to 2017 data, only 250 hospitals are registered with NOTTO – National Organ and Tissue Transplant Organization, which maintains the national organ registry.


Lives can be saved by organ transplantations. Statistics suggest that every year large number of people die due to non-availability of organs. In the absence of monetary or other such incentives, it is difficult to get the donation rates up. In such a scenario, government plays the biggest role. Many countries have adopted an opt-out policy concerning organ donation where the country by default assumes that the individual is a registered donor unless she opts out. This policy till a certain limit has worked because individuals who were earlier lazy or loss averse are now under the donor bracket. However there are a lot of people who are still unaware and have superstitions and myths that prevents them from becoming donors. Thus, only policy or legislative changes of opt-out and opt-in policies are not enough. In order to increase donations and effective organ transplantations, along with policy change non-legislative measures are also required namely a procurement infrastructure, an extensive network of medical centers, public awareness as well as medical staff and doctors’ awareness.

Great Depression: What Happened, Causes, How It Ended

During the 1930s. America went through one of the worst economic declines in world history, The Great Depression. Many believe it was sole because of the stock market crash, however other factors played a huge role in causing the Great Depression to occur. Bank failures, the Smoot-Hawley Tariff in the 1930s, and weather conditions from the Dust Bowl all played a critical factor in influencing this economic depression within America.

Throughout America’s history, much examination has been placed in the role of the stock market in causing major market crashes and recessions that have significantly changed the everyday living within America. One of the more famous examples of these events was the Great Depression, a significant worldwide event that took place in the early 1930s in America. During the 1930s, America went through one of the worst economic declines in world history. Many believe it was solely because of the stock market crash, however other factors played a huge role in causing The Great Depression to occur. The popular belief was that the markets collapsed, creating a larger hole for America to climb out of; which quickly in return turned into utter chaos. In reality, bank failures, the Smoot-Hawley Tariff in 1930, weather conditions from the Dust Bowl all played a crucial factor in influencing this economic depression within America.

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In the period immediately preceding the Great Depression, ideological nationalism in economics began to manifest. It manifested in the Smoot-Hawley Tariff of 1930, which many speculate to have at least been a minor contributor to the Great Depression. Tariffs are not well received by companies and investors alike in the stock market. Tariffs make imports costlier and exports more expensive in return, due to the natural response foreign countries do and place on one another after a country ratifies a tariff they came up with. (Kennedy, 2003)

Given the laws of supply and demand, one can begin to speculate and link the cause of the Depression to the ratification of the tariff. When price rises, supply exceeds demand by a significant amount on most supply and demand curves. When there is an excessive supply of a product with low demand, it creates a shortage for businesses, as the product is no longer purchased and can no longer operate on its own buying and selling wise. Many people who have analyzed this theory believe that the effect of tariffs was minimal, as the failure of the banks could not have been attributed to one market, however others say banks did have the greatest impact on the economic decline, because in the year of 1928, the Federal Reserve, despite knowing it could cause problems to many businesses, ended easy credit, and began a tight money policy raising interest rates from 3.5% to 5% (Crafts, 2010).

With many businesses failing due to conflicting prices, because of tariffs, unemployment in the United States was at one of the highest it’s ever been with an unemployment rate of 22.9% in 1932. Because the unemployment rate was so high, many people suffered from not only not having reliable income, but from starvation, because with money not flowing within the economy properly as it should be, this created a variety of problems for many families across the country (Crafts, 2010).

The trouble with this theory is that businesses knew during this time that there was a growing lack of confidence. This was attributed to the banks, who had begun to fail and as a result created a declining market force with demand driving down. Thus, two different conditions needed to be taken into account – demand driving down while the amount of supplies remained at the same level which would create a shortage for businesses. Given the horrible market condition, as weak market conditions would emerge, businesses would be looking at a long path of unsolvable problems for many years to come (Kennedy 2003).

One of the greater ironies of the flawed reasoning behind Smoot-Hawley was how quickly the tariffs would backfire on them. Many states had already begun experiencing moderate financial panics, due to the ratification of the new tariffs that were anticipated to take place along with the failure in some of banks throughout the country. During the summer of 1930, a wave of heat and dry conditions known as the “Dust Bowl” ran through the United States. The Dust Bowl wiped out or severely harmed almost all crop producers across the country, creating an extreme force upon the supply of the agriculture industry. Consider that during this time, foreign countries had begun realizing and predicting as to the potential effects of tariffs on goods that they were importing to the United States. The agriculture scene would be particularly negatively affected, as they depended on raw products to function as a business. With foreign relationships worsening due to the “unexpected” response to the new tariffs, farms and rural communities which depended on agriculture would greatly suffer. A period of dryness and record-setting heat temperatures above 100 degrees Fahrenheit occurred frequently across the United States. Their crops were essentially inhospitable for growth because of the various factors, meaning that there would be little to no food for an extensive period. Furthermore, with worsening business from imports and exports soon to be affected, these communities were put into a strong bind that would be nearly impossible to break out of. (Romer, 2018).

Primary sources collected measuring the health of Midwestern economies such as St. Louis provides valuable insight into the problems that arose for these communities (Federal Home Loan Bank Board). The standard of living dropped, with little to no business available because of the inhospitable temperatures of the summer. Goods quickly became useless, and the entire economic scheme of the country was put into jeopardy (Federal Home Loan Bank Board, 1933).

One of the more hotly debated causes of the Great Depression was the failure of banks. Since the Depression occurred, two rational school thoughts have emerged about theories for why the onset of bank failures caused the Depression during this time. The Keynesian school of thought was centered around the belief that demand was temporarily driven down, and the reactions and greed of investors pushed the economy to the point of no return as money supply continued to dry up. Monetarist school of thought believed that the federal reserve forced the hands of banks by creating unrealistic levels of money supply which shrunk the economy and created a panic (Kennedy, 2003).

Both schools of thought are correct in their approach, but incorrect in their findings. During the few years preceding the crisis known as “Black Tuesday,” banks were beginning to fail. A bank has the responsibility to hold onto and secure funds for its customers. Naturally, given that the banks were starting to fail, there was a concern about the ability of banks across the country to be able to keep customers’ funds secured. As news began to spread, a general panic rose in which consumers began to rapidly withdraw their money from the banks because they no longer trusted them. A quick withdrawal of funds from the banks, combined with ongoing liabilities, created an issue of insolvency that very few banks could recover from. Afterwards, the government, had to figure out how to recapture these funds and keep the banks alive because a severe withdrawal of money being supplied into the market would be catastrophic. The government resolved to shrink the money supply, as it would lessen the effects of the sudden withdrawal and panic that had begun in the years before the Depression (Romer, 2018).

The problem with such action was that the withdrawal of money supply from the market indicated that there was a growing concern about the health of the market. Worried, investors began to withdraw their money from stocks, much like many in the banks had already been doing. Furthermore, the United States experienced a drastic downfall in the industrial production with a decline of 46.8% while the Gross Domestic Product (GDP) fell by 30% Combined with the effects of insolvency, individuals had to take out loans to cover their debts due to the failure of the bank to hold onto their money securely. Banks that had been thriving realized that it was no longer savory to participate in the market, and began to withdraw their investments along with halting providing loans. Thus, an enormous amount of money that had been supplied into the market was leaving within a short period due to the banks. Inevitably, failure followed, and the Depression began (Romer, 2018).

The Great Depression is popularly blamed on circumstance, rather than on incompetence. It is clear that the government’s actions had a direct impact on the initiation of The Great Depression, and on the quality of living of its citizens throughout the country. Furthermore, along with the Dust Bowl which created enormous agricultural deficit. When all is analyzed, we can say the government played a role on this depression; however, these consequences were utterly preventable with given the right education. Unfortunately, information was not as available, and the decision making of ratifying the Smoot-Hawley Tariff in 1930, and bank failures caused a huge economic decline along with the weather conditions from the Dust Bowl.

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