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Charitable giving when altruism and similarity are linked

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  • Rotemberg, Julio J.

Abstract

This paper presents a model in which anonymous charitable donations are rationalized by two human tendencies drawn from the psychology literature. The first is people's disproportionate disposition to help those they agree with while the second is the dependence of peoples' self-esteem on the extent to which they perceive that others agree with them. Government spending crowds out the charity that ensues from these forces only modestly. Moreover, people's donations tend to rise when others donate. In some equilibria of the model, poor people give little because they expect donations to come mainly from richer individuals. In others, donations by poor individuals constitute a large fraction of donations and this raises the incentive for poor people to donate. The model provides interpretations for episodes in which the number of charities rises while total donations are stagnant.

Suggested Citation

  • Rotemberg, Julio J., 2014. "Charitable giving when altruism and similarity are linked," Journal of Public Economics, Elsevier, vol. 114(C), pages 36-49.
    • Handle: RePEc:eee:pubeco:v:114:y:2014:i:c:p:36-49
    DOI: 10.1016/j.jpubeco.2012.09.003
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why are the poor more generous?
      by Economic Logician in Economic Logic on 2012-02-20 21:22:00

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    Cited by:

    1. 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.
    2. Ek, Claes, 2015. "Some Causes are More Equal than Others? Behavioral Spillovers in Charitable Giving," Working Papers 2015:29, Lund University, Department of Economics.
    3. Cammie Hensley & Sonali Diddi & Karen Hyllegard, 2019. "Millennial Consumers’ Responses to Cause-Related Marketing in Support of LGBTQ Homeless Youth," Social Sciences, MDPI, vol. 8(8), pages 1-20, August.
    4. Nicolas J. Duquette & Enda Hargaden, 2018. "Inequality, Social Distance, and Giving," Working Papers 2018-03, University of Tennessee, Department of Economics.
    5. 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.
    6. Cueva, Carlos & Dessi, Roberta, 2012. "Charitable Giving, Self-Image and Personality," TSE Working Papers 12-342, Toulouse School of Economics (TSE).
    7. Ek, Claes, 2018. "Prosocial behavior and policy spillovers: A multi-activity approach," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 356-371.
    8. Vonțea Andreea-Angela, 2018. "Determinants of the Individuals’ Willingness to Support Nonprofit Organizations – An Integrative Theoretical Perspective," International Conference on Marketing and Business Development Journal, The Bucharest University of Economic Studies, vol. 1(2), pages 84-91, December.
    9. van Rijn, Jordan & Barham, Bradford & Sundaram-Stukel, Reka, 2016. "An Experimental Approach to Comparing Similarity- and Guilt-Based Charitable Appeals," Staff Paper Series 584, University of Wisconsin, Agricultural and Applied Economics.
    10. van Rijn, Jordan & Barham, Bradford & Sundaram-Stukel, Reka, 2017. "An experimental approach to comparing similarity- and guilt-based charitable appeals," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 25-40.

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    More about this item

    Keywords

    Charitable contributions; Altruism; Homophily;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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