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Dimensions of donation preferences: the structure of peer and income effects

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  • Michalis Drouvelis

    (University of Birmingham
    CESifo)

  • Benjamin M. Marx

    (University of Illinois)

Abstract

Charitable donations provide positive externalities and can potentially be increased with an understanding of donor preferences. We obtain a uniquely comprehensive characterization of donation motives using an experiment that varies treatments between and within subjects. Donations are increasing in peers’ donations and past subjects’ donations. These and other results suggest a model of heterogeneous beliefs about the social norm for giving. Estimation of such a model reveals substantial heterogeneity in subjects’ beliefs about and adherence to the norm. A simple fundraising strategy increases donations by an estimated 30% by exploiting previously unstudied correlations between dimensions of donor preferences.

Suggested Citation

  • Michalis Drouvelis & Benjamin M. Marx, 2021. "Dimensions of donation preferences: the structure of peer and income effects," Experimental Economics, Springer;Economic Science Association, vol. 24(1), pages 274-302, March.
  • Handle: RePEc:kap:expeco:v:24:y:2021:i:1:d:10.1007_s10683-020-09661-z
    DOI: 10.1007/s10683-020-09661-z
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    Cited by:

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    2. Michalis Drouvelis & Adam Isen & Benjamin M. Marx, 2019. "The Bonus-Income Donation Norm," CESifo Working Paper Series 7961, CESifo.

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    More about this item

    Keywords

    Charitable; Donation; Altruism; Warm glow; Social preferences; Peer effects; Experiment;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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