Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods
AbstractMatching 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 â€œhelping handâ€ social preference should be counted in benefit-cost analysis.
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Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 39 (2010)
Issue (Month): 2 (April)
matching grants; public goods; charitable giving; voluntary contributions; experimental economics; warm glow; helping hand; Environmental Economics and Policy; Public Economics;
Other versions of this item:
- Koji Kotani & Kent D. Messer & William D. Schulze, 2009. "The Nature of Voluntary Public Good Contributions: When are They a Warm Glow or a Helping Hand?," Working Papers EMS_2009_08, Research Institute, International University of Japan.
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