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Helping the Helpers: Altruism As A Rational Choice of Donors to A Students Voluntary Organization

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  • Juan-Camilo Cárdenas

    ()

  • Miguel Andrés Espinosa

    ()

  • Sandra Polanía Reyes

    ()

Abstract

Altruism, understood as the individual disposition to sacrifice personal income to improve someone else´s income can be a rational choice strategy which responds to different motivations, incentives and institutions, in a consistent way with the donor´s optimization logic. In this article we extend the Andreoni and Miller´s experimental design (2002) using a modified Dictator game and we applied it to 470 students from several universities and different majors, years of study and level of income who can donate part of their income to the Bella Flor Foundation (http://www.bellaflor.org/), a real nonprofit organization founded by a group of college students whose mission is to promote the integral development of the children from Bella Flor, Paraíso and Mirador neighborhoods through social activities in education, health care, recreation, and exalting human values". We test the consistency of the player´s decisions with the axioms of revealed preferences, and with the effects of relative prices and income. We also evaluate the violation of consistency of the axioms and estimate the demand functions for altruism towards this charity, with policy implications related to the optimal design for fundraising strategies. Our results confirm that a significant fraction of individuals show consistent decisions, i.e. that donations to these charities behave as "normal goods" in price and income effects and with rather small number of violations of the axioms of revealed preferences. However, the experimental data suggests that revealing the identity of the donor can decrease altruism and induce more violations of the axioms of consistent behavior mentioned."

Suggested Citation

  • Juan-Camilo Cárdenas & Miguel Andrés Espinosa & Sandra Polanía Reyes, 2009. "Helping the Helpers: Altruism As A Rational Choice of Donors to A Students Voluntary Organization," DOCUMENTOS CEDE 006149, UNIVERSIDAD DE LOS ANDES-CEDE.
  • Handle: RePEc:col:000089:006149
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    File URL: http://economia.uniandes.edu.co/publicaciones/dcede2009-30.pdf
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    References listed on IDEAS

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    1. Wooldridge, Jeffrey M., 1997. "On two stage least squares estimation of the average treatment effect in a random coefficient model," Economics Letters, Elsevier, vol. 56(2), pages 129-133, October.
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    3. Gaviria, Alejandro & Pages, Carmen, 2002. "Patterns of crime victimization in Latin American cities," Journal of Development Economics, Elsevier, pages 181-203.
    4. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2010. "Crime Distribution and Victim Behavior during a Crime Wave," NBER Chapters,in: The Economics of Crime: Lessons for and from Latin America, pages 175-204 National Bureau of Economic Research, Inc.
    5. Steven D. Levitt, 1999. "The changing relationship between income and crime victimization," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 87-98.
    6. Isaac Ehrlich, 1996. "Crime, Punishment, and the Market for Offenses," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 43-67, Winter.
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    Cited by:

    1. Andrés Pérez, Vanezza Rodríguez, Fernando Sotelo, 2012. "Altruismo vs. egoísmo en la educación humanista," REVISTA CIFE, UNIVERSIDAD SANTO TOMÁS, December.

    More about this item

    Keywords

    altruism; experimental economics; consistency; GARP; Charity; dictator game; Bella Flor.;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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