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Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

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Author Info

  • Kotani, Koji
  • Messer, Kent D.
  • Schulze, William D.

Abstract

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand†social preference should be counted in benefit-cost analysis.

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Bibliographic Info

Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

Volume (Year): 39 (2010)
Issue (Month): 2 (April)
Pages:

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Handle: RePEc:ags:arerjl:90843

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Web page: http://www.narea.org/
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Related research

Keywords: matching grants; public goods; charitable giving; voluntary contributions; experimental economics; warm glow; helping hand; Environmental Economics and Policy; Public Economics;

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Cited by:
  1. Kent D. Messer & James J. Murphy, 2010. "Foreword: Special Issue on Experimental Methods in Environmental, Natural Resource and Agricultural Economics," Working Papers 2010-03, University of Alaska Anchorage, Department of Economics.
  2. Swallow, Stephen K., 2013. "Demand-side Value for Ecosystem Services and Implications for Innovative Markets: Experimental Perspectives on the Possibility of Private Markets for Public Goods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(1), April.

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