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Is More Information Always Better? An Experimental Study of Charitable Giving and Hurrican Katrina

  • Catherine Eckel

    ()

    (School of Economics, Political and Policy Sciences, University of Texas at Dallas)

  • Philip J. Grossman

    ()

    (Department of Economics, Saint Cloud State University)

  • Angela Milano

    ()

    (School of Economics, Political and Policy Sciences, University of Texas at Dallas)

We report results of an experiment designed to assess the impact of Hurricane Katrina on the pattern and level of charitable contributions of donors. The study includes an experimental measure of charitable giving and targets three charities: the American Red Cross, the Salvation Army, and Oxfam International. In the experiment subjects make allocation decisions from three endowments ($10, $20, and $50) and with four different matching subsidies (0%, 25%, 50%, and 100%), with the matching amount provided by the experimenter. Two locations (Texas and Minnesota) and two information conditions are used. Survey measures of sympathy, risk perceptions, and perceptions of Katrina victims are also collected. The probability and amount of giving are responsive to the experimental design parameters—the endowment and match. We find evidence of “Katrina overload” as those closest to the disaster respond negatively to Katrina-related priming information. Perceptions of the psychological attitudes of the victims of the disaster have a significant effect on the amount given.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 74 (2007)
Issue (Month): 2 (October)
Pages: 388-411

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Handle: RePEc:sej:ancoec:v:74:1:y:2007:p:388-411
Contact details of provider: Web page: http://www.southerneconomic.org/
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