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Modelling charitable donations to an unexpected natural disaster: Evidence from the U.S. Panel Study of Income Dynamics

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  • Brown, Sarah
  • Harris, Mark N.
  • Taylor, Karl

Abstract

Using household-level data, we explore the relationship between donations to the victims of the 2004 Indian Ocean tsunami disaster and other charitable donations. The empirical evidence suggests that donations specifically for the victims of the tsunami are positively associated with the amount previously donated to other charitable causes. This relationship exists when we decompose overall charitable donations into different types of philanthropy, with charitable contributions to caring and needy organisations having the largest positive association with donations to the victims of the tsunami. Furthermore, when we explore the impact of donations to the victims of the tsunami on future donations to charity, there is evidence of a positive relationship with the largest association with donations to caring and needy organisations. Hence, there is no evidence to suggest that unplanned spending on donations to an unforeseen natural disaster diverts future expenditure away from donations to other charitable causes.

Suggested Citation

  • Brown, Sarah & Harris, Mark N. & Taylor, Karl, 2012. "Modelling charitable donations to an unexpected natural disaster: Evidence from the U.S. Panel Study of Income Dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 97-110.
  • Handle: RePEc:eee:jeborg:v:84:y:2012:i:1:p:97-110
    DOI: 10.1016/j.jebo.2012.08.005
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    Cited by:

    1. Kimberley Scharf & Sarah Smith & Mark Ottoni-Wilhelm, 2022. "Lift and Shift: The Effect of Fundraising Interventions in Charity Space and Time," American Economic Journal: Economic Policy, American Economic Association, vol. 14(3), pages 296-321, August.
    2. Brown, Sarah & Greene, William H. & Harris, Mark N. & Taylor, Karl, 2015. "An inverse hyperbolic sine heteroskedastic latent class panel tobit model: An application to modelling charitable donations," Economic Modelling, Elsevier, vol. 50(C), pages 228-236.
    3. Krasteva, Silvana & Yildirim, Huseyin, 2016. "Information, competition, and the quality of charities," Journal of Public Economics, Elsevier, vol. 144(C), pages 64-77.
    4. Ek, Claes, 2017. "Some causes are more equal than others? The effect of similarity on substitution in charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 136(C), pages 45-62.
    5. Ryo Ishida, 2014. "Determinants of Charitable Giving to Unexpected Natural Disasters: Evidence from Two Major Earthquakes in Japan," Discussion papers ron256, Policy Research Institute, Ministry of Finance Japan.
    6. Peter G. Backus & Nicky L. Grant, 2019. "How sensitive is the average taxpayer to changes in the tax-price of giving?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 317-356, April.
    7. Ek, Claes, 2015. "Some Causes are More Equal than Others? Behavioral Spillovers in Charitable Giving," Working Papers 2015:29, Lund University, Department of Economics.
    8. Meer, Jonathan, 2017. "Does fundraising create new giving?," Journal of Public Economics, Elsevier, vol. 145(C), pages 82-93.
    9. Mayo, Jennifer, 2021. "How do big gifts affect rival charities and their donors?," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 575-597.
    10. Brown, Sarah & Taylor, Karl, 2015. "Charitable Behaviour and the Big Five Personality Traits: Evidence from UK Panel Data," IZA Discussion Papers 9318, Institute for the Study of Labor (IZA).
    11. Perroni, Carlo & Scharf, Kimberley & Talavera, Oleksandr & Vi, Linh, 2022. "Does online salience predict charitable giving? Evidence from SMS text donations," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 134-149.
    12. Pierre-Guillaume Méon & Philip Verwimp, 2016. "Pro-social behavior after a disaster: parochial or universal? Evidence from a natural experiment in Belgium," Working Papers CEB 16-054, ULB -- Universite Libre de Bruxelles.
    13. Sarah Smith & Kimberley Scharf & Mark Ottoni-Wilhelm, 2017. "Lift and shift: the effect of fundraising interventions in charity space and time," IFS Working Papers W17/20, Institute for Fiscal Studies.
    14. Ross Hickey & Bradley Minaker & A. Abigail Payne, 2019. "The Sensitivity of Charitable Giving to the Timing and Salience of Tax Credits," National Tax Journal, National Tax Association;National Tax Journal, vol. 72(1), pages 79-110, March.
    15. Naoko Okuyama & Mototsugu Fukushige, 2021. "Limited Prosocial Response: Post‐Disaster Charitable Behavior of Public Sector Workers," Kyklos, Wiley Blackwell, vol. 74(1), pages 77-102, February.
    16. Méon, Pierre-Guillaume & Verwimp, Philip, 2022. "Pro-social behavior after a disaster: Evidence from a storm hitting an open-air festival," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 493-510.
    17. Perroni, Carlo & Scharf, Kimberley & Talavera, Oleksandr & Vi, Linh, 2021. "Online Salience and Charitable Giving: Evidence from SMS Donations," CAGE Online Working Paper Series 536, Competitive Advantage in the Global Economy (CAGE).
    18. Ilya O. Ryzhov & Bin Han & Jelena Bradić, 2016. "Cultivating Disaster Donors Using Data Analytics," Management Science, INFORMS, vol. 62(3), pages 849-866, March.
    19. Blanco, Esther & Baier, Alexandra & Holzmeister, Felix & Jaber-Lopez, Tarek & Struwe, Natalie, 2022. "Substitution of social sustainability concerns under the Covid-19 pandemic," Ecological Economics, Elsevier, vol. 192(C).
    20. Chandrayee Chatterjee & James C. Cox & Michael K. Price & Florian Rundhammer, 2020. "Robbing Peter to Pay Paul: Understanding How State Tax Credits Impact Charitable Giving," NBER Working Papers 27163, National Bureau of Economic Research, Inc.
    21. Ek, Claes, 2015. "Prosocial Behavior and Policy Spillovers: A Multi-Activity Approach," Working Papers 2015:26, Lund University, Department of Economics, revised 11 Sep 2017.
    22. Cai, Meina & Caskey, Gregory W. & Cowen, Nick & Murtazashvili, Ilia & Murtazashvili, Jennifer Brick & Salahodjaev, Raufhon, 2022. "Individualism, economic freedom, and charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 868-884.
    23. Insler, Michael A. & McMurrey, Bryce & McQuoid, Alexander F., 2019. "From broken windows to broken bonds: Militarized police and social fragmentation," Journal of Economic Behavior & Organization, Elsevier, vol. 163(C), pages 43-62.
    24. Tiefenbach, Tim & Kohlbacher, Florian, 2015. "Disasters, donations, and tax law changes: Disentangling effects on subjective well-being by exploiting a natural experiment," Journal of Economic Psychology, Elsevier, vol. 50(C), pages 94-112.
    25. Wodon, Quentin & Alleyne, Betty & Cong, Lin & Mulusa, Judy & Niami, Farhad, 2014. "Accounting for Trends in Charitable Tax Deductions: Framework and Application to the District of Columbia," MPRA Paper 45392, University Library of Munich, Germany.

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    More about this item

    Keywords

    Charity; Donations; System tobit; Tobit;
    All these keywords.

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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