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Local Public Goods and the Crowding-out Hypothesis: Evidence from Civic Crowdfunding

Author

Listed:
  • Daniel A Brent

    (Pennsylvania State University)

  • Nathan W Chan

    (University of Massachusetts Amherst)

Abstract

We study civic crowdfunding campaigns, which leverage online platforms to raise funds for local public goods. We investigate ``crowding-out'' along two dimensions. We test whether an individual's contributions to a campaign are diminished by (1) the availability of another charitable cause and (2) contributions from other donors. We find strong robust evidence of a negative relationship between donating to a specific campaign and donating to the civic crowdfunding platform. Crowding out across charitable causes is most prevalent among donors who live far away from the crowdfunding campaign's location and among donors living in low-income neighborhoods. We find limited and inconclusive evidence of crowding-out across donors. The findings represent an initial empirical exploration of crowding out in civic crowdfunding.

Suggested Citation

  • Daniel A Brent & Nathan W Chan, 2019. "Local Public Goods and the Crowding-out Hypothesis: Evidence from Civic Crowdfunding," Economics Bulletin, AccessEcon, vol. 39(3), pages 2142-2154.
    • Handle: RePEc:ebl:ecbull:eb-19-00354
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    References listed on IDEAS

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    Cited by:

    1. De Crescenzo, Veronica & Botella-Carrubi, Dolores & Rodríguez García, María, 2021. "Civic crowdfunding: A new opportunity for local governments," Journal of Business Research, Elsevier, vol. 123(C), pages 580-587.
    2. Chan, Nathan W. & Wolk, Leonard, 2020. "Cost-effective giving with multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 130-145.

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    More about this item

    Keywords

    crowdfunding; charitable giving; crowding-out;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • D1 - Microeconomics - - Household Behavior

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