Modelling Charitable Donations: A Latent Class Panel Approach
AbstractAbstract: We apply a latent class tobit framework to the analysis of charitable donations at the household level where the latent class aspect of the model splits households into two groups, which we subsequently interpret as "low" donators and "high" donators. Then the tobit part of the model explores the determinants of the amount donated by each household conditional on being in that class. We consider both total donations and also separately religious donations. Our findings, which are based on US panel data, suggest that price and labour income elasticities differ substantially across the two classes. The inverse price effect is most pronounced for the "low" donators group for both total and religious donations. The labour income elasticity switches direction of influence upon charitable donations across the two latent classes with a negative influence for the "high" donators group and a positive influence for the "low" donators group, for the case of total donations to charity, a pattern which is reversed in the case of solely religious donations.
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Bibliographic InfoPaper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2010017.
Length: 29 pages
Date of creation: Sep 2010
Date of revision: Sep 2010
Charity; Donations; Latent Class; Panel Data; Tobit;
Find related papers by JEL classification:
- D19 - Microeconomics - - Household Behavior - - - Other
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-02 (All new papers)
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