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Charitable giving as a gift exchange: Evidence from a field experiment

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  • Armin Falk

Abstract

This study reports data from a field experiment that was conducted to investigate the relevance of gift-exchange for charitable giving. Roughly 10,000 solicitation letters were sent to potential donors in the experiment. One third of the letters contained no gift, one third contained a small gift and one third contained a large gift. Whether a potential donor received a letter with or without a gift was randomly determined. We observe strong and systematic effects from including gifts. Compared to the no gift condition, the relative frequency of donations increased by 17 percent if a small gift was included and by 75 percent for a large gift. Consequently, including gifts was highly profitable for the charitable organization. The contribution of this paper is twofold: first, it shows that gift-exchange is important for charitable giving, in addition to the warm-glow motive. Second, the paper confirms the economic relevance of reciprocity by using field data. This extends the current body of research on reciprocity, which is almost exclusively confined to laboratory studies.

Suggested Citation

  • Armin Falk, 2004. "Charitable giving as a gift exchange: Evidence from a field experiment," Natural Field Experiments 00238, The Field Experiments Website.
    • Handle: RePEc:feb:natura:00238
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    References listed on IDEAS

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    1. Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
    2. James Andreoni, 1995. "Warm-Glow versus Cold-Prickle: The Effects of Positive and Negative Framing on Cooperation in Experiments," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 1-21.
    3. Ernst Fehr & Georg Kirchsteiger & Arno Riedl, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 108(2), pages 437-459.
    4. John A. List & David Lucking-Reiley, 2002. "The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 215-233, February.
    5. George A. Akerlof, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, Oxford University Press, vol. 97(4), pages 543-569.
    6. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
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    Citations

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    Cited by:

    1. Pieter Gautier & Bas van der Klaauw, 2006. "Grow rich while you sleep: Selection in experiments with voluntary participation," Natural Field Experiments 00245, The Field Experiments Website.
    2. Francis Kamarz (editor) & Joshua D. Angrist & David M. Blau & Armin Falk & Jean-Marc Robin & Christopher R. Taber, 2006. "How to do empirical economics," Investigaciones Economicas, Fundación SEPI, vol. 30(2), pages 179-206, May.
    3. Elisabeth Gsottbauer & Jeroen Bergh, 2011. "Environmental Policy Theory Given Bounded Rationality and Other-regarding Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(2), pages 263-304, June.
    4. Akçomak, İ. Semih & ter Weel, Bas, 2012. "The impact of social capital on crime: Evidence from the Netherlands," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 323-340.
    5. repec:ehl:lserod:33114 is not listed on IDEAS
    6. Urs Fischbacher & Simon G�chter, 2005. "Heterogeneous social preferences and the dynamics of free riding in public goods," IEW - Working Papers 261, Institute for Empirical Research in Economics - University of Zurich.
    7. John A. List, 2006. "The Behavioralist Meets the Market: Measuring Social Preferences and Reputation Effects in Actual Transactions," Journal of Political Economy, University of Chicago Press, vol. 114(1), pages 1-37, February.
    8. Rachel Croson & Enrique Fatas & Tibor Neugebauer, 2006. "An Experimental Analysis Of Conditional Cooperation," Working Papers. Serie AD 2006-24, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    9. Akcomak, Semih, 2009. "Bridges in social capital: A review of the definitions and the social capital of social capital researchers," MERIT Working Papers 002, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Stephan Meier & Alois Stutzer, "undated". "Matching Donations - Subsidizing Charitable Giving in a Field Experiment," IEW - Working Papers 181, Institute for Empirical Research in Economics - University of Zurich.
    11. Briers, Barbara & Pandelaere, Mario & Warlop, Luk, 2007. "Adding exchange to charity: A reference price explanation," Journal of Economic Psychology, Elsevier, vol. 28(1), pages 15-30, January.
    12. Reinstein, David, 2007. "Substitution Between (and Motivations for) Charitable Contributions: An Experimental Study," Economics Discussion Papers 2935, University of Essex, Department of Economics.
    13. Bruno S. Frey & Stephan Meier, 2004. "Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment," American Economic Review, American Economic Association, vol. 94(5), pages 1717-1722, December.
    14. Säve-Söderbergh, Jenny, 2005. "Who is Willing to Let Ethics Guide His Economic Decision-Making? Evidence from Individual Investments in Ethical Funds," Working Paper Series 7/2005, Stockholm University, Swedish Institute for Social Research.
    15. John A. List, 2011. "The Market for Charitable Giving," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 157-180, Spring.
    16. Bruno S. Frey & Stephan Meier, "undated". "Social Comparisons and Pro-social Behavior - Testing �Conditional Cooperation� in a Field Experiment," IEW - Working Papers 162, Institute for Empirical Research in Economics - University of Zurich.
    17. Philip Brown & Jessica Minty, 2006. "Media Coverage & Charitable Giving After the 2004 Tsunami," William Davidson Institute Working Papers Series wp855, William Davidson Institute at the University of Michigan.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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