Money To Live

February 16, 2010

More on opting out

Filed under: Uncategorized — by moneytolive @ 4:10 pm
Despite the economic assumption that humans are rational, study after study shows – surprisingly? – that humans are not rational. A common example of our irrationality is in our hesitance to “opt.” Countries that have opt out policies (rather than opt in) for organ donation have much higher rates of organ donation. Businesses that have opt out policies for 401(k)s report higher employee contributions. etc.
As part of the process of licensing a car in Washington state, there is an opt out $5 park donation fee. Before paying $144 to title and register my car, I asked to see a breakdown of the costs. When I asked about the $5 donation, the nice man explained that Washington recently changed from an opt in donation policy to an opt out donation policy. He said that only about half of the people he sees ask to see their bill before paying, and I would guess that most of those people are donating $5 without knowing it.
In theory, I support many opt out policies, and I was pretty surprised to see that it almost slipped past me. I wanted there to be explicit disclosure of the policy, but then it would be more like an opt in policy.
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