Inefficient but Effective? A field experiment on the effectiveness of direct and indirect transfer mechanisms
AbstractWe conduct a field experiment on direct and indirect transfer mechanisms. It shows that people are willing to donate significantly more if the donation is indirect, i.e., it is tied to the purchase of a good with a price premium, rather than made directly. This points to an efficiency–effectiveness trade–off: even though indirect donations are less efficient than direct donations, they are more effective in mobilizing resources. Our findings hold for ‘Fair Trade’ coffee as well as for ‘normal’ coffee. However, the strength of the efficiency–effectiveness trade–off is higher in the case of ‘Fair Trade’.
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Bibliographic InfoPaper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 200802.
Length: 21 pages
Date of creation: 2008
Date of revision:
Tied transfers; donations; charity; efficiency versus effectiveness; ‘fair trade’;
Other versions of this item:
- Hannes Koppel & Günther G. Schulze, 2008. "Inefficient but effective? A field experiment on the effectiveness of direct and indirect transfer mechanisms," Discussion Paper Series 2, Department of International Economic Policy, University of Freiburg, revised Mar 2008.
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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