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Peer Effects in Charitable Giving: Evidence from the (Running) Field

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  • Sarah Smith
  • Frank Windmeijer
  • Edmund Wright

Abstract

There is a widespread belief that peer effects are important in charitable giving, but surprisingly little evidence on how donors respond to their peers in practice. Analysing a unique dataset of donations to online fundraising pages, we show that peer effects are positive and sizeable: a £10 increase in the mean of past donations increases giving by £2.50, on average. We show that donations respond to large and small donations and to changes in the mode. We find little evidence that donations signal charity quality – our preferred explanation is that donors use information on (the distribution of) earlier donations to decide what is appropriate for them to give.
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Suggested Citation

  • Sarah Smith & Frank Windmeijer & Edmund Wright, 2015. "Peer Effects in Charitable Giving: Evidence from the (Running) Field," Economic Journal, Royal Economic Society, vol. 125(585), pages 1053-1071, June.
    • Handle: RePEc:wly:econjl:v:125:y:2015:i:585:p:1053-1071
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    File URL: http://hdl.handle.net/10.1111/ecoj.2015.125.issue-585
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    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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