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Category Reporting in Charitable Giving: An Experimental Analysis

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  • Li, Jingping
  • Riyanto, Yohanes E.

Abstract

Harbaugh (1998a) has shown theoretically that charities can increase the size of donations by publicly acknowledging their donors using categories. In a complementary paper,using the data on the donations given by 146 lawyers to their almamater law school, Harbaugh (1998b) provided empirical support for this theoretical assertion. Essentially, being acknowledged in categories gives donors some prestige benefits. In this paper, we experimentally investigate the impact of various reporting plans as described in Harbaugh (1998a and 1998b) on the behavior of donors. Our results show that, although the category reporting plan has no significant impact on the size of donations when compared to the exact reporting plan and the no reporting plan, it does signi�ficantly alter the charitable behavior of donors. We show that the presence of a category reporting plan induces the clustering of donations on the lower boundaries of categories, which suggests that donors are motivated by prestige. We also discover that in some circumstances the presence of prestige benefi�ts crowds out the warm glow motive for giving.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18414.

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Date of creation: Aug 2009
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Handle: RePEc:pra:mprapa:18414

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Keywords: laboratory experiment; charitable giving; reporting plans; prestige; warm glow;

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  1. 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.
  2. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
  3. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
  4. Glazer, Amihai & Konrad, Kai A, 1996. "A Signaling Explanation for Charity," American Economic Review, American Economic Association, vol. 86(4), pages 1019-28, September.
  5. Soetevent, Adriaan R., 2005. "Anonymity in giving in a natural context--a field experiment in 30 churches," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2301-2323, December.
  6. Rege, Mari & Telle, Kjetil, 2004. "The impact of social approval and framing on cooperation in public good situations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1625-1644, July.
  7. Potters, J.J.M. & Sefton, M. & Vesterlund, L., 2003. "After You - Endogenous Sequencing in Voluntary Contribution Games," Discussion Paper 2003-98, Tilburg University, Center for Economic Research.
  8. Vesterlund, Lise, 2003. "The informational value of sequential fundraising," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 627-657, March.
  9. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-82, May.
  10. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  11. Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-67, December.
  12. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  13. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
  14. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-48, February.
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Cited by:
  1. James T. Edwards & John A. List, 2013. "Toward an Understanding of why Suggestions Work in Charitable Fundraising: Theory and Evidence from a Natural Field Experiment," CESifo Working Paper Series 4531, CESifo Group Munich.
  2. Anya Savikhin & Roman Sheremeta, 2010. "Visibility of Contributions and Cost of Information: An Experiment on Public Goods," Working Papers 10-22, Chapman University, Economic Science Institute.
  3. Samek, Anya & Sheremeta, Roman, 2013. "Recognizing Contributors: An Experiment on Public Goods," MPRA Paper 52921, University Library of Munich, Germany.

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