The bizzare world of economists

October 17, 2009

Q: Why shouldn’t you wear a motocycle helmet?
A: Because I am an organ donor.

One of the main arguments for enforcing by law the use of motorcycle helmets (and safety belts) is that there are “negative externalities” associated with accidents: it is the society that will bear the medical costs, the loss of productivity, the waste of education, or the higher insurance premiums.

And typically negative externalities are either criminalised or taxed (to the extent where the tax equals the social costs, a Pigovian tax).

Now in this research paper the authors find that helmet laws have a significant impact on the size of the organ donor pool, and therefore there is a “positive externality” present as well, as (on average) three helmetless dead motorcyclists save one individual on a transplant waiting list.

Which, in the world of economics, means that we should be either directly subsidising helmetless riding, or we should offer income tax deductions, to the extend of the third of a life that we would potentially save. Of course conditional on the rider becoming an organ donor.

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