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