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Peer Effects in Charitable Giving: Evidence from the (Running) Field

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  • Sarah Smith
  • Frank Windmeijer
  • Edmund Wright

Abstract

There is a widespread belief that peer effects are important in charitable giving, but surprisingly little evidence on how donors respond to their peers. We analyse a unique dataset of donations to online fundraising pages to provide evidence on the direction and magnitude of peer effects – we find that a £10 increase in the mean of past donations increases giving by £3.50, on average. We also explore potential explanations for why peers matter. We find no evidence that donations provide a signal of charity quality, nor any role for fundraising targets. Our preferred explanation is that donors benchmark themselves against the distribution of donations from their peers.
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Suggested Citation

  • Sarah Smith & Frank Windmeijer & Edmund Wright, 2015. "Peer Effects in Charitable Giving: Evidence from the (Running) Field," Economic Journal, Royal Economic Society, vol. 125(585), pages 1053-1071, June.
    • Handle: RePEc:wly:econjl:v:125:y:2015:i:585:p:1053-1071
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    File URL: http://hdl.handle.net/10.1111/ecoj.2015.125.issue-585
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    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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