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Crowding-out voluntary contributions to public goods

Author

Listed:
  • Chan, Kenneth S.
  • Godby, Rob
  • Mestelman, Stuart
  • Andrew Muller, R.

Abstract

We test the null hypothesis that involuntary transfers for the provision of a public good will completely crowd out voluntary transfers against the warm-glow hypothesis that crowding-out will be incomplete because individuals care about giving. Our design differs from the related design used by Andreoni in considering two levels of the involuntary transfer and a wider range of contribution possibilities, and in mixing groups every period instead of every four periods. We analyse the data with careful attention to boundary effects. We retain the null hypothesis of complete crowding-out in two of three pairwise comparisions, but reject it in favour of incomplete crowding-out in the comparison most closely akin to Andreoni's design. Thus we confirm the existence of incomplete crowding-out in some environments, but suggest that the warm-glow hypothesis is inadequate in explaining it.
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Suggested Citation

  • Chan, Kenneth S. & Godby, Rob & Mestelman, Stuart & Andrew Muller, R., 2002. "Crowding-out voluntary contributions to public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 48(3), pages 305-317, July.
  • Handle: RePEc:eee:jeborg:v:48:y:2002:i:3:p:305-317
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    References listed on IDEAS

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C29 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Other
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

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