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Peer effects in charitable giving: Evidence from the (running) field

Author

Listed:
  • 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. We analyse a unique dataset of donations to online fundraising pages to provide evidence on the direction and magnitude of peer effects – we find that a £10 increase in the mean of past donations increases giving by £3.50, on average. We also explore potential explanations for why peers matter. We find no evidence that donations provide a signal of charity quality, nor any role for fundraising targets. Our preferred explanation is that donors benchmark themselves against the distribution of donations from their peers.

Suggested Citation

  • Sarah Smith & Frank Windmeijer & Edmund Wright, 2012. "Peer effects in charitable giving: Evidence from the (running) field," The Centre for Market and Public Organisation 12/290, The Centre for Market and Public Organisation, University of Bristol, UK.
  • Handle: RePEc:bri:cmpowp:12/290
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    File URL: http://www.bristol.ac.uk/cmpo/publications/papers/2012/wp290.pdf
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    References listed on IDEAS

    as
    1. Bruce Sacerdote, 2001. "Peer Effects with Random Assignment: Results for Dartmouth Roommates," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 681-704.
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    3. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 607-654.
    4. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    5. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    charitable giving; peer effects; donations;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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