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Does charitable giving crowd out support for government spending?

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  • Werfel, Seth H.

Abstract

Government spending has been shown to crowd out charitable giving. This article uses survey experiments to demonstrate that charitable giving can reciprocally crowd out support for government spending. Moreover, this crowding-out effect in public opinion varies by political ideology and by issue. In Study 1, survey respondents who were randomly assigned to read about charitable giving in a particular area were less likely to support additional taxation and government spending in that domain. This result was driven by liberals in the arts domain and moderates and conservatives in the human services domain. Study 2 leveraged data from the “Ice Bucket Challenge” to replicate this effect among very liberal respondents and show that crowding-out was attenuated when respondents perceived donations to have greater impact.

Suggested Citation

  • Werfel, Seth H., 2018. "Does charitable giving crowd out support for government spending?," Economics Letters, Elsevier, vol. 171(C), pages 83-86.
    • Handle: RePEc:eee:ecolet:v:171:y:2018:i:c:p:83-86
    DOI: 10.1016/j.econlet.2018.07.015
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    References listed on IDEAS

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    1. Karlan, Dean & Wood, Daniel H., 2017. "The effect of effectiveness: Donor response to aid effectiveness in a direct mail fundraising experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 1-8.
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    3. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    4. Nyborg, Karine & Rege, Mari, 2003. "Does Public Policy Crowd Out Private Contributions to Public Goods," Public Choice, Springer, vol. 115(3-4), pages 397-418, June.
    5. Jones, Kristy, 2017. "Government or charity? Preferences for welfare provision by ethnicity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 72-77.
    6. Thomas Garrett & Russell Rhine, 2010. "Government growth and private contributions to charity," Public Choice, Springer, vol. 143(1), pages 103-120, April.
    7. Seth H. Werfel, 2017. "Household behaviour crowds out support for climate change policy when sufficient progress is perceived," Nature Climate Change, Nature, vol. 7(7), pages 512-515, July.
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    Cited by:

    1. Sarah Brown & Karl Taylor, 2019. "Charitable Behaviour and Political Ideology: Evidence for the UK," Working Papers 2019002, The University of Sheffield, Department of Economics.
    2. McCannon, Bryan C. & Ferreira Neto, Amir B., 2021. "Charitable giving for cultural goods: Asymmetric gender responses to votes on tax increases," Economics Letters, Elsevier, vol. 204(C).
    3. 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.

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    More about this item

    Keywords

    Charitable giving; Crowding-out; Government spending; Public opinion; Survey experiments;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • H4 - Public Economics - - Publicly Provided Goods
    • D10 - Microeconomics - - Household Behavior - - - General

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