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Rebate Subsidies, Matching Subsidies and Isolation Effects

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  • Douglas D. Davis

    () (Department of Economics, VCU School of Business)

Abstract

In a series of recent experiments (Davis, Millner and Reilly, 2005, Eckel and Grossman, 2003, 2005a-c, 2006), matching subsidies generate significantly higher charity receipts than do theoretically equivalent rebate subsidies. This paper reports a laboratory experiment conducted to examine whether the higher receipts are attributable to a relative preference for matching subsidies or to an ‘isolation effect’ (McCaffery and Baron, 2003, 2006). Some potential policy implications of isolation effects on charitable contributions are also considered.

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File URL: http://www.people.vcu.edu/~dddavis/papers/DAVIS2006CM.pdf
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Bibliographic Info

Paper provided by VCU School of Business, Department of Economics in its series Working Papers with number 0604.

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Length: 22 pages
Date of creation: Jun 2006
Date of revision:
Publication status: Published in Judgment and Decision-Making, 1, pages 13-22
Handle: RePEc:vcu:wpaper:0604

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Keywords: experiments; charitable contributions; methodology;

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References

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  1. James Andreoni & Lise Vesterlund, 2001. "Which Is The Fair Sex? Gender Differences In Altruism," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 293-312, February.
  2. Dean Karlan & John A. List, 2006. "Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment," Working Papers 1, The Field Experiments Website.
  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.
  4. repec:feb:framed:0021 is not listed on IDEAS
  5. McCaffery, Edward J. & Baron, Jonathan, 2003. "The Humpty Dumpty blues: Disaggregation bias in the evaluation of tax systems," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 230-242, July.
  6. Stephan Meier, 2007. "Do Subsidies Increase Charitable Giving in the Long Run? Matching Donations in a Field Experiment," Journal of the European Economic Association, MIT Press, vol. 5(6), pages 1203-1222, December.
  7. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
  8. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
  9. 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.
  10. Catherine C. Eckel & Philip J. Grossman, 2006. "Do Donors Care about Subsidy Type? An Experimental Study," Monash Economics Working Papers archive-10, Monash University, Department of Economics.
  11. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-41, September.
  12. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
  13. Catherine Eckel & Philip Grossman, 2005. "Subsidizing charitable contributions: A field test comparing matching and rebate subsidies," Framed Field Experiments 00145, The Field Experiments Website.
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Cited by:
  1. Ronald J. Baker II & James M. Walker & Arlington W. Williams, 2006. "Matching Contributions and the Voluntary Provision of a Pure Public Good: Experimental Evidence," Caepr Working Papers 2006-007, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Dec 2007.
  2. Alvin Etang Ndip & David Fielding & Stephen Knowles, 2010. "Giving to Africa and Perceptions of Poverty," Working Papers 1008, University of Otago, Department of Economics, revised Aug 2010.
  3. Catherine Eckel & Philip Grossman, 2008. "Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies," Experimental Economics, Springer, vol. 11(3), pages 234-252, September.

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