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Modeling Charitable Giving Using a Box-Cox Standard Tobit Model

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  • Lankford, R Hamilton
  • Wyckoff, James H

Abstract

There is a large literature investigating the determinants of charitable giving, in particular, price and income elasticities. We find that many of the most often reported results from this literature rely on a model specification that is inappropriate when applied to recent Federal Tax File data. We develop a standard Tobit model with a Box-Cox transformation parameter that nests a number of other specifications. The Box-Cox model yields estimates of price elasticities and expected charitable contributions that differ from those obtained using the typical specification. Additionally, we find that the use of sample weights provides potentially important policy insights. Copyright 1991 by MIT Press.

Suggested Citation

  • Lankford, R Hamilton & Wyckoff, James H, 1991. "Modeling Charitable Giving Using a Box-Cox Standard Tobit Model," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 460-470, August.
    • Handle: RePEc:tpr:restat:v:73:y:1991:i:3:p:460-70
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    Cited by:

    1. 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.
    2. 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.
    3. Reinstein David A, 2011. "Does One Charitable Contribution Come at the Expense of Another?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-54, June.
    4. Andrew Jones & Richard Marriott, 1994. "Determinants of the level and methods of charitable giving in the 1990 Family Expenditure Survey," Applied Economics Letters, Taylor & Francis Journals, vol. 1(11), pages 200-203.
    5. 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.
    6. Bari K. Yörük, 2010. "Charitable Giving by Married Couples Revisited," Journal of Human Resources, University of Wisconsin Press, vol. 45(2).
    7. Auten, Gerald & Joulfaian, David, 1996. "Charitable contributions and intergenerational transfers," Journal of Public Economics, Elsevier, vol. 59(1), pages 55-68, January.
    8. Marcel Bilger & Jean-Paul Chaze, 2008. "What Drives Individual Health Expenditure in Switzerland?," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 144(III), pages 337-358, September.
    9. Steven Yen & Hung-Hao Chang & Tsui-Fang Lin, 2013. "Out-of-pocket expenditures on traditional and Western medicine in Taiwan," International Journal of Public Health, Springer;Swiss School of Public Health (SSPH+), vol. 58(4), pages 583-592, August.
    10. Robert McClelland & Mary F. Kokoski, 1994. "Econometric Issues in the Analysis of Charitable Giving," Public Finance Review, , vol. 22(4), pages 498-517, October.
    11. Grubert, Harry & Newlon, T. Scott, 1996. "Reply to Avi-Yonah," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(2), pages 267-267, June.
    12. Reinstein, David, 2006. "Does One Contribution Come at the Expense of Another? Empirical Evidence on Substitution Between Charitable Donations," Economics Discussion Papers 2938, University of Essex, Department of Economics.
    13. 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.
    14. Jean‐Paul Chaze, 2005. "Assessing household health expenditure with Box–Cox censoring models," Health Economics, John Wiley & Sons, Ltd., vol. 14(9), pages 893-907, September.
    15. O'Neil, Cherie J. & Steinberg, Richard S. & Thompson, G. Rodney, 1996. "Reassessing the Tax-Favored Status of the Charitable Deduction for Gifts of Appreciated Assets," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(2), pages 215-233, June.
    16. James Carroll & Siobhan McCarthy & Carol Newman, 2005. "An Econometric Analysis of Charitable Donations in the Republic of Ireland," The Economic and Social Review, Economic and Social Studies, vol. 36(3), pages 229-249.
    17. Backus, Peter, 2010. "Is charity a homogeneous good?," Economic Research Papers 270773, University of Warwick - Department of Economics.
    18. Schwer, Keith & Daneshvary, Rennae, 1999. "The Impact of Casino Gambling on Charitable Contributions: The Willingness to Contribute to a Local Public Television Station," The Review of Regional Studies, Southern Regional Science Association, vol. 29(1), pages 77-90, Summer.
    19. Sarah Brown & Karl Taylor, 2019. "Charitable Behaviour and Political Ideology: Evidence for the UK," Working Papers 2019002, The University of Sheffield, Department of Economics.
    20. Ilya O. Ryzhov & Bin Han & Jelena Bradić, 2016. "Cultivating Disaster Donors Using Data Analytics," Management Science, INFORMS, vol. 62(3), pages 849-866, March.
    21. Backus, Peter, 2010. "Is charity a homogeneous good?," The Warwick Economics Research Paper Series (TWERPS) 951, University of Warwick, Department of Economics.
    22. O'Neil, Cherie J. & Steinberg, Richard S. & Thompson, G. Rodney, 1996. "Reassessing the Tax-Favored Status of the Charitable Deduction for Gifts of Appreciated Assets," National Tax Journal, National Tax Association, vol. 49(2), pages 215-33, June.
    23. Grubert, Harry & Newlon, T. Scott, 1996. "Reply to Avi-Yonah," National Tax Journal, National Tax Association, vol. 49(2), pages 267, June.
    24. 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.

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