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Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

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  • Kotani, Koji
  • Messer, Kent D.
  • Schulze, William D.

Abstract

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand†social preference should be counted in benefit-cost analysis.

Suggested Citation

  • Kotani, Koji & Messer, Kent D. & Schulze, William D., 2010. "Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
  • Handle: RePEc:ags:arerjl:90843
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    1. repec:eee:jeeman:v:84:y:2017:i:c:p:209-222 is not listed on IDEAS
    2. Messer, Kent D. & Murphy, James J., 2010. "FOREWORD: Special Issue on Experimental Methods in Environmental, Natural Resource, and Agricultural Economics," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
    3. Kenta Tanaka & Keisaku Higashida & Arvin Vista & Anton Setyo Nugroho & Budi Muhamad Ruslan, 2016. "Do resource depletion experiences affect social cooperative preferences? Analysis using field experimental data on fishers in the Philippines and Indonesia," Discussion Paper Series 143, School of Economics, Kwansei Gakuin University, revised Jun 2016.
    4. Swallow, Stephen K., 2013. "Demand-side Value for Ecosystem Services and Implications for Innovative Markets: Experimental Perspectives on the Possibility of Private Markets for Public Goods," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(01), pages 33-56, April.
    5. Fooks, Jacob R. & Messer, Kent D., 2012. "Maximizing conservation and in-kind cost share: Applying Goal Programming to forest protection," Journal of Forest Economics, Elsevier, vol. 18(3), pages 207-217.

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