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Charitable giving in the German welfare state: fiscal incentives and crowding out

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  • Timm Bönke

    ()

  • Nima Massarrat-Mashhadi

    ()

  • Christian Sielaff

    ()

Abstract

There are two ways that government activities influence private charitable giving: (1) government spending on the provision of public goods may cause crowding out of private charitable contributions; and (2) tax incentives may boost private charitable giving. From a sample of German income tax returns, we estimate the elasticity of charitable giving relative to tax incentives, income, and government spending. Using censored quantile regression analysis, we derive results for different points of the underlying distribution of charitable giving. Evaluating overall treasury efficiency, the tax deductibility of charitable donations fosters enough private giving to offset foregone tax revenues. Copyright Springer Science+Business Media, LLC 2013

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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 154 (2013)
Issue (Month): 1 (January)
Pages: 39-58

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Handle: RePEc:kap:pubcho:v:154:y:2013:i:1:p:39-58

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Charitable giving; Crowding out; Price and income elasticity; Censored quantile regression; Income tax return data; C31; H31; H53;

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References

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Cited by:
  1. Adena, Maja, 2014. "Tax-price elasticity of charitable donations: Evidence from the German taxpayer panel," Discussion Papers, Research Unit: Economics of Change SP II 2014-302, Social Science Research Center Berlin (WZB).

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