Essay on Oswald 2001

Submitted By tomac10
Words: 1165
Pages: 5

KYKLOS, Vol. 54 – 2001 – Fasc. 2/3, 379–382

Economics that Matters: Using the Tax System to Solve the Shortage of Human Organs
Andrew Oswald*

Although most people are unaware of it, the world faces a critical shortage.
There are too few organ donors.
Every hour, one American and one European die for want of a transplant donor. Yet in principle there are enough natural (though tragically untimely) deaths to provide sufficient donors for our citizens. There is a vital demand.
There is also a supply. But those two are not being brought together.
New ideas are therefore essential: we have to find a way to match supply with demand. While this is a complicated and sensitive area of human life, it would be sensible for our nations to offer a small tax incentive to those willing to carry a donation card and act as potential organ donor in the event of their own death. This is an economic approach. But it could solve a medical problem.
In the United Kingdom, for instance, approximately 6000 people are waiting at any one time for transplants of major organs – especially kidney, pancreas, heart, lung, liver. Underlying demand is even larger than this suggests. If the supply of organs were greater, the official waiting-list figure would be longer.
Around 3000 transplants are done each year in the UK.
In the United States, at any time 70 000 men and women are waiting for a transplant of a major body organ. The annual number of transplants in the US is only approximately 20 000. Clearly there is something fundamentally wrong with the matching of supply and demand.
The National Kidney Foundation of the USA estimates that 50 Americans die each week for want of a kidney donor alone.
Throughout the world, the great bulk of all organ transplants are from cadaver donors (that is, after the death of the person donating the organ). In addition to these statistics, large numbers of eye cornea transplants are done. These are successful and comparatively inexpensive.

* University of Warwick, UK. E-mail:


Macintosh HD:Aufträge:HEL002:13425_S_Kyklos_02-03/01:13425_3AK:Kyklos_2-3/01_193-506_3AK

12. April 2001 13:47


A tax scheme could run like this. It would offer a small lump sum reduction on a person’s income tax bill if he or she agreed to be a potential donor in the future. It is unlikely that the size of the incentive would have to be large. A tax break would itself serve, by offering a box to tick on a tax form, to highlight a problem about which few now speak; it would be effective advertising; and human altruism would do the rest. Subsidising altruism, although policy economists have not thought a lot about it, seems to make sense.
Say the tax reduction for a person were 10 pounds (15 dollars) a year. In a country such as the United Kingdom, there are around 20 million taxpayers of working age. This might mean a cost to the Exchequer of 200 million pounds sterling. Arguably, the tax incentive and publicity would more than double the stock of officially registered potential organ donors from its current 8 million people. If so, it might be feasible to increase the number of transplants by around 2000a year. The implicit tax cost in a nation like the UK would then be close to 100 000 pounds per annum per extra transplant.
Although this is a large sum, it is not unacceptably great. There are enormous costs of providing, for example, kidney dialysis treatment to those waiting for a transplant. The lost income from having workers incapacitated is considerable.
More important, the value in pain and suffering from major illness might be considered to make efficient any tax scheme that could deliver such an outcome.
Of course similar set-ups could work in other nations. The shortage of human organs is true in all of the advanced industrial economies.
Moreover, this problem is not going to go away in our lifetimes, for the following reasons.
Paradoxically, economic progress is worsening our