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Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment

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Author Info
Karlan, Dean (Yale U)
List, John (U of Chicago)

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Abstract

We conducted a natural field experiment to explore the effect of price changes on charitable contributions. To operationalize our tests, we examine whether an offer to match contributions to a non-profit organization changes the likelihood and amount that an individual donates. Direct mail solicitations were sent to over 50,000 prior donors. We find that the match offer increases both the revenue per solicitation and the probability that an individual donates. While comparisons of the match treatments and the control group consistently reveal this pattern, larger match ratios (i.e., $3:$1 and $2:$1) relative to smaller match ratios ($1:$1) had no additional impact. The results have clear implications for practitioners in the design of fundraising campaigns and provide avenues for future empirical and theoretical work on charitable giving. Further, the data provide an interesting test of important methods used in cost-benefit analysis.

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Paper provided by Yale University, Department of Economics in its series Working Papers with number 13.

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Date of creation: Apr 2006
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Handle: RePEc:ecl:yaleco:13

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C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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  1. Brown, Sarah & Harris, Mark N. & Taylor, Karl, 2009. "Modelling Charitable Donations to an Unexpected Natural Disaster: Evidence from the U.S. Panel Study of Income Dynamics," IZA Discussion Papers 4424, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Hahn, Jinyong & Hirano, Keisuke & Karlan, Dean, 2008. "Adaptive Experimental Design Using the Propensity Score," MPRA Paper 8315, University Library of Munich, Germany. [Downloadable!]
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  7. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies," Working Papers 2008-08 Classification-C9, Saint Cloud State University, Department of Economics, revised Dec 2007. [Downloadable!]
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  8. Jeffrey R. Kling, 2007. "Methodological Frontiers of Public Finance Field Experiments," NBER Working Papers 12931, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. Brian McManus & Richard Bennet, 2008. "The Demand for Products Linked to Public Goods: Evidence from an Online Field Experiment," Working Papers 08-28, NET Institute, revised Oct 2008. [Downloadable!]
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  18. Ronald J. Baker II & James M. Walker & Arlington W. Williams, 2006. "Matching Contributions and the Voluntary Provision of a Pure Public Good: Experimental Evidence," Caepr Working Papers 2006-007, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Dec 2007. [Downloadable!]
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  19. Nava Ashraf & James Berry & Jesse M. Shapiro, 2007. "Can Higher Prices Stimulate Product Use? Evidence from a Field Experiment in Zambia," NBER Working Papers 13247, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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