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Time Is Money: Choosing between Charitable Activities

  • Naomi E. Feldman

This paper analyzes the impact of a preferential tax-price for monetary donations on the joint decision to donate time (volunteer) and money. The methodological approach takes into account that consumption of each charitable good affects consumption of the other. Using data from a national survey on household charitable giving, the results show that donations of time and money are substitutes. However, a decrease in the tax-price of monetary donations also has a positive effect on donations of time that acts outside the change in relative prices. This more than offsets the substitution effect leading to an overall positive correlation between the two charitable goods. (JEL D64, H24, H31)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.2.1.103
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File URL: http://www.aeaweb.org/aej/pol/data/2008-0055_data.zip
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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 2 (2010)
Issue (Month): 1 (February)
Pages: 103-30

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Handle: RePEc:aea:aejpol:v:2:y:2010:i:1:p:103-30
Note: DOI: 10.1257/pol.2.1.103
Contact details of provider: Web page: https://www.aeaweb.org/aej-policy
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  1. Duncan, Brian, 1999. "Modeling charitable contributions of time and money," Journal of Public Economics, Elsevier, vol. 72(2), pages 213-242, May.
  2. Freeman, Richard Barry, 1997. "Working for Nothing: The Supply of Volunteer Labor," Scholarly Articles 4632239, Harvard University Department of Economics.
  3. Feldstein, Martin & Clotfelter, Charles, 1976. "Tax incentives and charitable contributions in the United States : A microeconometric analysis," Journal of Public Economics, Elsevier, vol. 5(1-2), pages 1-26.
  4. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-43, May.
  5. Tiehen, Laura, 2001. "Tax Policy and Charitable Contributions of Money," National Tax Journal, National Tax Association, vol. 54(n. 4), pages 707-23, December.
  6. Reece, William S, 1979. "Charitable Contributions: New Evidence on Household Behavior," American Economic Review, American Economic Association, vol. 69(1), pages 142-51, March.
  7. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 371-382, March.
  8. Boskin, Michael J & Feldstein, Martin S, 1977. "Effects of the Charitable Deduction on Contributions by Low Income and Middle Income Households: Evidence from the National Survey of Philanthropy," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 351-54, August.
  9. Brown, Eleanor & Lankford, Hamilton, 1992. "Gifts of money and gifts of time estimating the effects of tax prices and available time," Journal of Public Economics, Elsevier, vol. 47(3), pages 321-341, April.
  10. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
  11. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 709-38, August.
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