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Charitable Giving as a Gift Exchange: Evidence from a Field Experiment

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Author Info
Falk, Armin () (IZA Bonn, University of Bonn, CEPR and CESifo)

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Abstract

This study reports data from a field experiment that was conducted to investigate the relevance of gift-exchange for charitable giving. Roughly 10,000 solicitation letters were sent to potential donors in the experiment. One third of the letters contained no gift, one third contained a small gift and one third contained a large gift. Whether a potential donor received a letter with or without a gift was randomly determined. We observe strong and systematic effects from including gifts. Compared to the no gift condition, the relative frequency of donations increased by 17 percent if a small gift was included and by 75 percent for a large gift. Consequently, including gifts was highly profitable for the charitable organization. The contribution of this paper is twofold: first, it shows that gift-exchange is important for charitable giving, in addition to the warm-glow motive. Second, the paper confirms the economic relevance of reciprocity by using field data. This extends the current body of research on reciprocity, which is almost exclusively confined to laboratory studies.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1148.

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Length: 16 pages
Date of creation: May 2004
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Handle: RePEc:iza:izadps:dp1148

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Related research
Keywords: charitable giving; field experiments; reciprocity;

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Find related papers by JEL classification:
C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

References listed on IDEAS
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  1. Ernst Fehr & Simon Gaechter, . "Fairness and Retaliation: The Economics of Reciprocitys," IEW - Working Papers iewwp040, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  2. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November. [Downloadable!] (restricted)
  3. James Andreoni, 1994. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," Experimental 9410002, EconWPA. [Downloadable!]
    Other versions:
  4. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May. [Downloadable!] (restricted)
  5. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Francis Kamarz (editor) & Joshua D. Angrist & David M. Blau & Armin Falk & Jean-Marc Robin & Christopher R. Taber, 2006. "How to do empirical economics," Investigaciones Economicas, Fundación SEPI, vol. 30(2), pages 179-206, May. [Downloadable!]
  2. Bruno S. Frey & Stephan Meier, 2004. "Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment," American Economic Review, American Economic Association, vol. 94(5), pages 1717-1722, December. [Downloadable!]
    Other versions:
  3. Urs Fischbacher & Simon Gächter, 2006. "Heterogeneous Social Preferences and the Dynamics of Free Riding in Public Goods," IZA Discussion Papers 2011, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Säve-Söderbergh, Jenny, 2005. "Who is Willing to Let Ethics Guide His Economic Decision-Making? Evidence from Individual Investments in Ethical Funds," Working Paper Series 7/2005, Swedish Institute for Social Research. [Downloadable!]
  5. Akçomak, I. Semih & ter Weel, Bas, 2008. "The Impact of Social Capital on Crime: Evidence from the Netherlands," IZA Discussion Papers 3603, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Akcomak, Semih, 2009. "Bridges in social capital: A review of the definitions and the social capital of social capital researchers," UNU-MERIT Working Paper Series 002, United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology. [Downloadable!]
  7. John A. List, 2005. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," NBER Working Papers 11616, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Simon Gaechter, 2006. "Conditional cooperation: Behavioral regularities from the lab and the field and their policy implications," Discussion Papers 2006-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham. [Downloadable!]
  9. Rachel Croson & Enrique Fatas & Tibor Neugebauer, 2006. "An Experimental Analysis Of Conditional Cooperation," Working Papers. Serie AD 2006-24, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie). [Downloadable!]
  10. Stephan Meier & Alois Stutzer, . "Matching Donations - Subsidizing Charitable Giving in a Field Experiment," IEW - Working Papers iewwp181, Institute for Empirical Research in Economics - IEW. [Downloadable!]
  11. David Reinstein, 2007. "Substitution Between (and Motivations for) Charitable Contributions: An Experimental Study," Economics Discussion Papers 648, University of Essex, Department of Economics. [Downloadable!]
  12. Philip Brown & Jessica Minty, 2006. "Media Coverage & Charitable Giving After the 2004 Tsunami," William Davidson Institute Working Papers Series wp855, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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