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Contributions in heterogeneous communities: Evidence from Indonesia

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  • Cagla Okten

    ()

  • Una Okonkwo Osili

    ()

Abstract

Using household-level data from Indonesia, we investigate the importance of community characteristics: ethnic diversity and central government transfers, inter alia, in determining monetary and time contributions to community organizations. We present a framework in which ethnic diversity affects contributions through three channels: (1) diversity of preferences (2) transaction costs, and (3) inter-household considerations in the form of altruism towards one’s ethnic group. Our empirical findings provide evidence that ethnic diversity has a negative and significant effect on contributions, and the prevalence of community organizations. We find evidence that government spending crowds out private monetary contributions, with a less robust effect on time contributions. Copyright Springer-Verlag 2004

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Bibliographic Info

Article provided by Springer in its journal Population Economics.

Volume (Year): 17 (2004)
Issue (Month): 4 (December)
Pages: 603-626

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Handle: RePEc:spr:jopoec:v:17:y:2004:i:4:p:603-626

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Related research

Keywords: O12; H41; J16; Z13; Ethnic diversity; contributions; transfers; community organizations;

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Cited by:
  1. Habyarimana, James P. & Humphreys, Macartan & Posner, Daniel N. & Weinstein, Jeremy, 2006. "Why Does Ethnic Diversity Undermine Public Goods Provision? An Experimental Approach," IZA Discussion Papers 2272, Institute for the Study of Labor (IZA).
  2. Oguzhan C. Dincer & Peter J. Lambert, 2006. "Taking care of your own: Ethnic and religious heterogeneity and income inequality," Working Papers 48, ECINEQ, Society for the Study of Economic Inequality.
  3. Pande, Rohini, 2007. "Understanding Political Corruption in Low Income Countries," Working Paper Series rwp07-020, Harvard University, John F. Kennedy School of Government.
  4. Daniel M. Hungerman, 2007. "Diversity and Crowd-out: A Theory of Cold-Glow Giving," NBER Working Papers 13348, National Bureau of Economic Research, Inc.
  5. James Andreoni & Abigail Payne & Justin D. Smith & David Karp, 2011. "Diversity and Donations: The Effect of Religious and Ethnic Diversity on Charitable Giving," NBER Working Papers 17618, National Bureau of Economic Research, Inc.
  6. Matthias Lücke & Toman Omar Mahmoud & Christian Peuker, 2012. "Identifying the Motives of Migrant Philanthropy," Kiel Working Papers 1790, Kiel Institute for the World Economy.
  7. Labonne, Julien & Chase, Robert S., 2009. "Who is at the Wheel When Communities Drive Development? Evidence from the Philippines," World Development, Elsevier, vol. 37(1), pages 219-231, January.
  8. Bandiera, Oriana & Levy, Gilat, 2011. "Diversity and the power of the elites in democratic societies: Evidence from Indonesia," Journal of Public Economics, Elsevier, vol. 95(11), pages 1322-1330.
  9. Hungerman, Daniel M., 2009. "Crowd-out and diversity," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 729-740, June.
  10. Go Kotera & Nobuhiro Mizuno & Keisuke Okada & Sovannroeun Samreth, 2011. "Ethnic Diversity, Democracy, and Health: Theory and Evidence," KIER Working Papers 790, Kyoto University, Institute of Economic Research.
  11. Bandiera, Oriana & Levy, Gilat, 2010. "Diversity and the Power of the Elites in Democratic Societies: A model and a test," CEPR Discussion Papers 7985, C.E.P.R. Discussion Papers.

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