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Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies

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Author Info
Catherine C. Eckel
Philip J. Grossman () (Department of Economics, St. Cloud State University)

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Abstract

We report the results of a field experiment conducted in conjunction with a mailed fundraising campaign of a nonprofit organization. The experiment is designed to compare the response of donors to subsidies in the form of matching amounts or refunded amounts. Matching subsidies are used by many corporations as an employee benefit; the US federal tax system subsidizes giving by making it tax deductible. The design includes a control group and two levels of subsidy of each type. Our main result is that matching subsidies result in larger total donations to charities than rebate subsidies. The results are qualitatively the same, and quantitatively very similar in magnitude to the lab results, validating lab estimates of responsiveness to subsidies of charitable giving.

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File URL: http://www.stcloudstate.edu/economics/documents/EckelGrossmanSubsidizing12_18_07.pdf
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Publisher Info
Paper provided by Saint Cloud State University, Department of Economics in its series Working Papers with number 2008-08 Classification-C93, D64, H41, L3.

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Date of creation: May 2006
Date of revision: Dec 2007
Handle: RePEc:scs:wpaper:0808

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Related research
Keywords: Field experiment; rebate subsidy; Matching subsidy; Charitable giving;

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  1. Glenn W. Harrison & John A. List, 2004. "Field Experiments," Journal of Economic Literature, American Economic Association, vol. 42(4), pages 1009-1055, December. [Downloadable!] (restricted)
  2. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February. [Downloadable!] (restricted)
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  3. Douglas Davis & Edward Millner & Robert Reilly, 2005. "Subsidy Schemes and Charitable Contributions: A Closer Look," Experimental Economics, Springer, vol. 8(2), pages 85-106, June. [Downloadable!] (restricted)
  4. Benabou, Roland & Tirole, Jean, 2003. "Incentives and Prosocial Behavior," IDEI Working Papers 389, Institut d'Économie Industrielle (IDEI), Toulouse, revised Jan 2006. [Downloadable!]
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  5. Dean Karlan & John A. List, 2006. "Does Price Matter in Charitable Giving? Evidence From a Large-Scale Natural Field Experiment," NBER Working Papers 12338, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Douglas D. Davis & Edward L. Millner, 2004. "Rebates, Matches, and Consumer Behavior," Working Papers 0401, VCU School of Business, Department of Economics. [Downloadable!]
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  7. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, Southern Economic Association, vol. 72(4), pages 794–807, April.
  8. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-60, June. [Downloadable!] (restricted)
  9. Douglas D. Davis, 2006. "Rebate Subsidies, Matching Subsidies and Isolation Effects," Working Papers 0604, VCU School of Business, Department of Economics. [Downloadable!]
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  10. John A. List, 2007. "Field Experiments: A Bridge Between Lab and Naturally-Occurring Data," NBER Working Papers 12992, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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