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Impure Impact Giving: Theory and Evidence

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  • Daniel M. Hungerman
  • Mark Ottoni-Wilhelm

Abstract

The paper presents a new model of charitable giving where individuals regard out-of-pocket donations and the matches they induce as different. The paper shows that match-price elasticities combine conventional price effects with the strength of warm-glow, so that match-price elasticity alone is insufficient to characterize preferences for giving. Match- and rebate-price elasticities will typically be different, but together they lead to tests of underlying giving preferences. It estimates, for the first time, a match-price elasticity together with a real-world tax-based rebate elasticity in a non-laboratory high-stakes setting. The estimates reject extant models of giving, but are consistent with the new theory.

Suggested Citation

  • Daniel M. Hungerman & Mark Ottoni-Wilhelm, 2018. "Impure Impact Giving: Theory and Evidence," Working Papers id:12906, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:12906
    Note: Institutional Papers
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    Citations

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    Cited by:

    1. Daniel Hungerman, 2023. "Tax evasion, efficiency, and bunching in the presence of enforcement notches," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(1), pages 43-68, February.
    2. Roman M. Sheremeta & Neslihan Uler, 2021. "The impact of taxes and wasteful government spending on giving," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 355-386, June.
    3. Asatryan, Zareh & Joulfaian, David, 2022. "Taxes and Business Philanthropy in Armenia," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 914-930.
    4. Fosgaard, Toke R. & Soetevent, Adriaan R., 2022. "I will donate later! A field experiment on cell phone donations to charity," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 549-565.
    5. Raphael Corbi & Fabio Miessi Sanches, 2022. "What Drives Religiosity in America? Evidence from an Empirical Hotelling Model of Church Competition," Working Papers, Department of Economics 2022_08, University of São Paulo (FEA-USP).
    6. Cagala, Tobias & Glogowsky, Ulrich & Grimm, Veronika & Rincke, Johannes & Tuset-Cueva, Amanda, 2019. "Rent extraction and prosocial behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 709-723.
    7. Marius A. K. Ring & Thor Olav Thoresen, 2022. "Wealth Taxation and Charitable Giving," CESifo Working Paper Series 9700, CESifo.
    8. Castillo, Marco & Petrie, Ragan & Wardell, Clarence, 2023. "Barriers to charitable giving," Journal of Public Economics, Elsevier, vol. 224(C).
    9. Freundt, Jana & Lange, Andreas, 2021. "On the voluntary provision of public goods under risk," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).
    10. Ross Hickey & Brad Minaker & A. Abigail Payne & Joanne Roberts & Justin Smith, 2023. "The Effect of Tax Price on Donations: Evidence from Canada," National Tax Journal, University of Chicago Press, vol. 76(2), pages 291-315.
    11. Adena, Maja, 2021. "How can we improve tax incentives for charitable giving? Lessons from field experiments in fundraising," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 344-353.
    12. Diederich, Johannes & Epperson, Raphael & Goeschl, Timo, 2023. "How to Design the Ask? Funding Units vs. Giving Money," Working Papers 0731, University of Heidelberg, Department of Economics.
    13. Raphael Corbi & Fabio Miessi Sanches, 2022. "Church Competition, Religious Subsidies and the Rise of Evangelicalism: a Dynamic Structural Analysis," Working Papers, Department of Economics 2022_09, University of São Paulo (FEA-USP).
    14. Castillo, Marco & Petrie, Ragan, 2020. "Optimal Incentives to Give," IZA Discussion Papers 13321, Institute of Labor Economics (IZA).
    15. Shusaku Sasaki & Hirofumi Kurokawa & Fumio Ohtake, 2022. "An experimental comparison of rebate and matching in charitable giving: The case of Japan," The Japanese Economic Review, Springer, vol. 73(1), pages 147-177, January.
    16. Diederich, Johannes & Epperson, Raphael & Goeschl, Timo, 2021. "How to Design the Ask? Funding Units vs. Giving Money," Working Papers 0698, University of Heidelberg, Department of Economics.

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    More about this item

    Keywords

    eSS; impure impact giving; model of charitable giving; out-of-pocket donations; match-price elasticities; price effect; warm-glow; ebate-price elasticities; tax; non-laboratory; new theory.;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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