Question

The approach to VSL based on government policies about kidney dialysis has no practical value because people can get kidney transplants instead.

True

False

Answer 1

False . It is true that kidney transplant is much better than dialysis but Value of Statistical Life based on government policies gives evidence that kidney transplant is much better option than dialysis as it is more economical in the following ways:

• The lifetime value of a kidney transplant to a recipient would be very large—about $1.3 million per recipient. And the savings from stopping dialysis would be even larger—about $1.45 million per recipient.
• The cost of compensating kidney donors will be very small as compared to other costs and benefits. The savings in this cost will be a boon for kidney recipients, society and also tax payers.The total cost of compensating all donors in a given year would be only about $2.6 billion per year.
• The net welfare gain for society each year from kidney transplants would more than triple from $20 billion per year currently to $66 billion per year. This results in large benefits to cost ratio for society at 3.0.
• Government compensation for Kidney donors will benefit taxpayers also.Because they currently bear most of the cost of both dialysis and kidney transplants, they would reap most of the benefits from more patients stopping expensive dialysis treatments after receiving a transplant.The aggregate savings for taxpayers will amount to about $14.1 billion per year.
• It will be very beneficial for poor kidney recipients. All costs of transplantation will be borne by taxpayer in the form of medicare and medicaid.
• To conclude the benefits received by society will be much more as compared to costs incurred by government in compensating the kidney donors.