The Hidden Tax You Pay When You’re Made to Wait

(Bloomberg News) -

Imagine that whenever you planned to do volunteer work, the government told you that you must also pay a small tax. Or suppose that whenever you gave money to charity, you were charged a levy. Or that every time you gave blood, you had to start by writing a check to the Internal Revenue Service.

Fortunately, most countries don’t tax people for good works. But private and public institutions do — by taking up too much of people’s time.

And like all taxes, a “time tax” discourages people from engaging in the behavior it penalizes.

Striking evidence for this comes from a new study by Australian economist Robert Slonin. With the help of a large data set from the Australia Red Cross Blood Service, Slonin and his co-authors quantified how variations in waiting time affected the likelihood that blood donors would come back to give again.

Typically, blood donation takes about 8-12 minutes, and though donors are encouraged to wait in the recovery room for 15 minutes more, they’re allowed to leave immediately if they want. The waiting time to start the process, though, is highly variable. In the authors’ large sample, the average was 43 minutes, but many donors had to wait for well over an hour.

As waiting times increase, people become more reluctant to return, the researchers found. Those who face long waits come back less, or not at all. Overall, a 38 percent increase in waiting time (about 20 minutes) decreases annual donations by 14 percent — eliminating 77,000 of the 604,007 whole blood donations in Australia.

In terms of public health, the news gets worse: Longer waiting times discourage whole-blood donors from going the next mile and becoming plasma donors. This is important, because many countries, including Australia, have severe plasma shortages (and hence have to rely on imported plasma from the United States).

(An intriguing side note: Essentially all of these effects are driven by men. In survey responses, women say that they were dissatisfied with their wait times, but long waits didn’t make them less likely to return.)

No doubt, these findings understate the harmful effects of long waits. For obvious reasons, Slonin’s study was limited to people who already found it worthwhile to devote time to giving blood. They could not investigate those who might have given blood but didn’t because they thought it would take too long.

Nor are the consequences of waiting times limited to the supply of whole blood and plasma. If 600,000 Australians are required to wait 20 extra minutes, that adds up to a loss of 12 million minutes (200,000 hours, or 5,000 full work weeks) that they might have spent on something more productive.

Time taxes are levied in many other domains. Charities and political campaigns alike are learning that an excellent way to increase donations is to make them easy or automatic.

Even if you have good health insurance, you might not go to a doctor for advice on your child’s mysterious ailment because you fear a long wait in the doctor’s office. I would speculate that this particular time tax keeps a lot of adults and children from getting medical attention they need, and that significant numbers of preventable health problems, and even deaths, result.

Every year, many people call for tax cuts. Far more attention should be paid to reducing time taxes, which can have serious adverse effects on people’s well-being.

Cass R. Sunstein, the former administrator of the White House Office of Information and Regulatory Affairs, is the Robert Walmsley university professor at Harvard Law School.