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Private versus Public Charity: Reassessing Crowding Out from the Supply Side

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  • Ferris, J Stephen
  • West, Edwin G

Abstract

This paper tests a model where government and private charity are perfect substitutes in consumption, but the cost of providing charitable assistance differs between private and government suppliers. The analysis demonstrates that higher costs of transferring through the government can account for the observed phenomenon of less than complete crowding out and the empirical results are broadly consistent with that approach. Overall the evidence is consistent with the hypothesis that individuals both care about the leakages involved in transferring funds to the poor through government and respond in their private giving to changes in the differential public cost. Copyright 2003 by Kluwer Academic Publishers

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  • Ferris, J Stephen & West, Edwin G, 2003. "Private versus Public Charity: Reassessing Crowding Out from the Supply Side," Public Choice, Springer, vol. 116(3-4), pages 399-417, September.
    • Handle: RePEc:kap:pubcho:v:116:y:2003:i:3-4:p:399-417
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    Cited by:

    1. Garth Heutel, 2014. "Crowding Out and Crowding In of Private Donations and Government Grants," Public Finance Review, , vol. 42(2), pages 143-175, March.
    2. Jun‐ichi Itaya & A.G. Schweinberger, 2006. "The public and private provision of pure public goods and the distortionary effects of income taxation: a political economy approach," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(3), pages 1023-1040, August.
    3. Corneo, Giacomo, 2008. "Charity and redistributive taxation in a unionized economy," Labour Economics, Elsevier, vol. 15(5), pages 831-843, October.
    4. Douglas Noonan, 2007. "Fiscal pressures, institutional context, and constituents: a dynamic model of states’ arts agency appropriations," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 31(4), pages 293-310, December.
    5. Nina Boberg‐Fazlić & Paul Sharp, 2017. "Does Welfare Spending Crowd Out Charitable Activity? Evidence from Historical England Under the Poor Laws," Economic Journal, Royal Economic Society, vol. 127(599), pages 50-83, February.
    6. Behrens, Christoph & Emrich, Eike & Hämmerle, Martin & Pierdzioch, Christian, 2017. "Match quality, crowding out, and crowding in: Empirical evidence for German sports clubs," Working Papers of the European Institute for Socioeconomics 21, European Institute for Socioeconomics (EIS), Saarbrücken.

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