IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v14y1986i4p415-431.html
   My bibliography  Save this article

Charitable Giving as a Mixed Public/Private Good: Implications for Tax Policy

Author

Listed:
  • Richard Steinberg

Abstract

This is an analysis of the effect of tax changes on charitable giving in a model in which donors possess both private and public good motivations. In Nash equilibrium, donors respond both to changes in taxes and to induced responses by other donors. The aggregate change in donations is smaller than it would be in the pure private model by a factor involving the extent of crowdout of one's own donations by others’ giving. The direction and magnitude of crowdout depends on the relative importance of the public and private motivations, the Hicksian relation between the two (substitutes or complements), the extent of over- or undersupply of the public good, and the income elasticity of demand for the public good.

Suggested Citation

  • Richard Steinberg, 1986. "Charitable Giving as a Mixed Public/Private Good: Implications for Tax Policy," Public Finance Review, , vol. 14(4), pages 415-431, October.
  • Handle: RePEc:sae:pubfin:v:14:y:1986:i:4:p:415-431
    DOI: 10.1177/109114218601400403
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218601400403
    Download Restriction: no

    File URL: https://libkey.io/10.1177/109114218601400403?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
    2. Burton Abrams & Mark Schitz, 1978. "The ‘crowding-out’ effect of governmental transfers on private charitable contributions," Public Choice, Springer, vol. 33(1), pages 29-39, March.
    3. Mackay, Robert J & Whitney, Gerald A, 1980. "The Comparative Statics of Quantity Constraints and Conditional Demands: Theory and Applications," Econometrica, Econometric Society, vol. 48(7), pages 1727-1744, November.
    4. Reece, William S & Zieschang, Kimberly D, 1985. "Consistent Estimation of the Impact of Tax Deductibility on the Level of Charitable Contributions," Econometrica, Econometric Society, vol. 53(2), pages 271-293, March.
    5. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
    6. Clotfelter, Charles T, 1980. "Tax Incentives and Charitable Giving: Evidence from a Panel of Taxpayers," Empirical Economics, Springer, vol. 13(3), pages 319-340, June.
    7. Sugden, Robert, 1982. "On the Economics of Philanthropy," Economic Journal, Royal Economic Society, vol. 92(366), pages 341-350, June.
    8. Clotfelter, Charles T., 1980. "Tax incentives and charitable giving: evidence from a panel of taxpayers," Journal of Public Economics, Elsevier, vol. 13(3), pages 319-340, June.
    9. Roberts, Russell D, 1984. "A Positive Model of Private Charity and Public Transfers," Journal of Political Economy, University of Chicago Press, vol. 92(1), pages 136-148, February.
    10. Schwartz, Robert A, 1970. "Personal Philanthropic Contributions," Journal of Political Economy, University of Chicago Press, vol. 78(6), pages 1264-1291, Nov.-Dec..
    11. Russell Roberts, 1985. "A taxonomy of public provision," Public Choice, Springer, vol. 47(1), pages 267-303, January.
    12. Martin McGuire, 1974. "Group size, group homo-geneity, and the aggregate provision of a pure public good under cournot behavior," Public Choice, Springer, vol. 18(1), pages 107-126, June.
    13. Reece, William S, 1979. "Charitable Contributions: New Evidence on Household Behavior," American Economic Review, American Economic Association, vol. 69(1), pages 142-151, March.
    14. John Posnett & Todd Sandler, 1986. "Joint Supply and the Finance of Charitable Activity," Public Finance Review, , vol. 14(2), pages 209-222, April.
    15. Stephen Long, 1976. "Social pressure and contributions to health charities," Public Choice, Springer, vol. 28(1), pages 55-66, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hamlett, Cathy A., 1987. "Private provision of local rural roads," ISU General Staff Papers 198701010800009541, Iowa State University, Department of Economics.
    2. Serge-Christophe Kolm, 2008. "Paradoxes of the War on Poverty: Warm-Glows and Efficiency," IDEP Working Papers 0807, Institut d'economie publique (IDEP), Marseille, France, revised 18 Nov 2008.
    3. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    4. repec:ebl:ecbull:v:10:y:2002:i:1:p:1-14 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Backus, Peter, 2010. "Is charity a homogeneous good?," Economic Research Papers 270773, University of Warwick - Department of Economics.
    2. Backus, Peter, 2010. "Is charity a homogeneous good?," The Warwick Economics Research Paper Series (TWERPS) 951, University of Warwick, Department of Economics.
    3. Smith, Vincent H. & Kehoe, Michael R. & Cremer, Mary E., 1995. "The private provision of public goods: Altruism and voluntary giving," Journal of Public Economics, Elsevier, vol. 58(1), pages 107-126, September.
    4. Russell N. James & Deanna L. Sharpe, 2007. "The “Sect Effect” in Charitable Giving: Distinctive Realities of Exclusively Religious Charitable Givers," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(4), pages 697-726, October.
    5. Peter Backus & Nicky Grant, 2016. "Consistent Estimation of the Tax-Price Elasticity of Charitable Giving with Survey Data," Economics Discussion Paper Series 1606, Economics, The University of Manchester.
    6. Serge-Christophe Kolm, 2008. "Paradoxes of the War on Poverty: Warm-Glows and Efficiency," IDEP Working Papers 0807, Institut d'economie publique (IDEP), Marseille, France, revised 18 Nov 2008.
    7. Cynthia Benzing & Thomas Andrews, 2004. "The effect of tax rates and uncertainty on contributory crowding out," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 32(3), pages 201-215, September.
    8. repec:ebl:ecbull:v:10:y:2002:i:1:p:1-14 is not listed on IDEAS
    9. Borgloh, Sarah, 2008. "What Drives Giving in Extensive Welfare States? The Case of Germany," ZEW Discussion Papers 08-123, ZEW - Leibniz Centre for European Economic Research.
    10. Timm Bönke & Nima Massarrat-Mashhadi & Christian Sielaff, 2013. "Charitable giving in the German welfare state: fiscal incentives and crowding out," Public Choice, Springer, vol. 154(1), pages 39-58, January.
    11. Bolton, Gary E. & Katok, Elena, 1998. "An experimental test of the crowding out hypothesis: The nature of beneficent behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 37(3), pages 315-331, November.
    12. 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.
    13. Ledyard, John O., "undated". "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
    14. Duncan, Brian, 1999. "Modeling charitable contributions of time and money," Journal of Public Economics, Elsevier, vol. 72(2), pages 213-242, May.
    15. Ayman Reda, 2012. "Religious Charities and Government Funding," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(3), pages 331-342, August.
    16. Arthur C. Brooks, 2003. "Do Government Subsidies To Nonprofits Crowd Out Donations or Donors?," Public Finance Review, , vol. 31(2), pages 166-179, March.
    17. 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.
    18. Dennis Coates, 1998. "Public Sector Crowding Out of Private Provision of Public Goods: the Influence of Differences in Production Costs," Public Finance Review, , vol. 26(5), pages 460-479, September.
    19. Randolph, William C, 1995. "Dynamic Income, Progressive Taxes, and the Timing of Charitable Contributions," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 709-738, August.
    20. Daphne T. Greenwood, 1993. "Price and Income Elasticities of Charitable Giving: How Should Income Be Measured?," Public Finance Review, , vol. 21(2), pages 196-209, April.
    21. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:14:y:1986:i:4:p:415-431. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.