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Do Market Incentives Crowd Out Charitable Giving?

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Donations and volunteerism can be conceived as market transactions with zero explicit price. However, evidence suggests people may not view zero as just another price when it comes to pro-­social behavior. Thus, while markets might be expected to increase the supply of assets available to those in need, some worry such financial incentives will crowd out altruistic giving. This paper reports laboratory experiments directly investigating the degree to which market incentives crowd out charity. The results suggest markets increase the supply of assets available to those in need. However, as some critics fear, market incentives disproportionately influence the relatively poor.

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Paper provided by Department of Economics, Simon Fraser University in its series Discussion Papers with number dp13-05.

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Length: 24
Date of creation: Jun 2013
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Handle: RePEc:sfu:sfudps:dp13-05

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Postal: Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
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Web page: http://www.sfu.ca/economics.html
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Postal: Working Paper Coordinator, Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, BC, V5A 1S6, Canada
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Keywords: Pro-­Social Behavior; Market Incentives; Crowding Out; Wealth Effects;

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  15. Alberto Abadie & Sebastien Gay, 2004. "The Impact of Presumed Consent Legislation on Cadaveric Organ Donation: A Cross Country Study," NBER Working Papers 10604, National Bureau of Economic Research, Inc.
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