IDEAS home Printed from https://ideas.repec.org/p/fip/fedbwp/13-11.html
   My bibliography  Save this paper

How low can you go? Charity reporting when donations signal income and generosity

Author

Listed:
  • Anat Bracha
  • Lise Vesterlund

Abstract

Consistent with nonprofit fundraising practices, donation visibility has been shown to increase giving. While concern for status is used to explain this response, the authors argue that this explanation relies on the assumption that giving signals only income or generosity. When giving signals both attributes overall status need not increase in donations, and donation-visibility may be harmful when individuals prefer to be perceived as poor-and-generous rather than rich-and-stingy. Using an experiment the authors find that both income-status and generosity-status concerns affect behavior. Furthermore, donation-visibility fails to increase contributions as low-income individuals select low donation amounts that are unlikely to be attributed to high-income individuals.

Suggested Citation

  • Anat Bracha & Lise Vesterlund, 2013. "How low can you go? Charity reporting when donations signal income and generosity," Working Papers 13-11, Federal Reserve Bank of Boston.
    • Handle: RePEc:fip:fedbwp:13-11
    as

    Download full text from publisher

    File URL: http://www.bostonfed.org/economic/wp/wp2013/wp1311.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hoffman Elizabeth & McCabe Kevin & Shachat Keith & Smith Vernon, 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games," Games and Economic Behavior, Elsevier, vol. 7(3), pages 346-380, November.
    2. Stefano DellaVigna & John A. List & Ulrike Malmendier, 2012. "Testing for Altruism and Social Pressure in Charitable Giving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 1-56.
    3. Ellingsen, Tore & Johannesson, Magnus, 2011. "Conspicuous generosity," Journal of Public Economics, Elsevier, vol. 95(9), pages 1131-1143.
    4. Andreoni, James & Petrie, Ragan, 2004. "Public goods experiments without confidentiality: a glimpse into fund-raising," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1605-1623, July.
    5. Edward P. Lazear & Ulrike Malmendier & Roberto A. Weber, 2012. "Sorting in Experiments with Application to Social Preferences," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 136-163, January.
    6. Carpenter, Jeffrey & Myers, Caitlin Knowles, 2010. "Why volunteer? Evidence on the role of altruism, image, and incentives," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 911-920, December.
    7. Muriel Niederle & Lise Vesterlund, 2007. "Do Women Shy Away From Competition? Do Men Compete Too Much?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1067-1101.
    8. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    9. Ireland, Norman J., 1994. "On limiting the market for status signals," Journal of Public Economics, Elsevier, vol. 53(1), pages 91-110, January.
    10. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    11. James Andreoni & B. Douglas Bernheim, 2009. "Social Image and the 50-50 Norm: A Theoretical and Experimental Analysis of Audience Effects," Econometrica, Econometric Society, vol. 77(5), pages 1607-1636, September.
    12. John R. Hamman & George Loewenstein & Roberto A. Weber, 2010. "Self-Interest through Delegation: An Additional Rationale for the Principal-Agent Relationship," American Economic Review, American Economic Association, vol. 100(4), pages 1826-1846, September.
    13. John A. List & Robert P. Berrens & Alok K. Bohara & Joe Kerkvliet, 2004. "Examining the Role of Social Isolation on Stated Preferences," American Economic Review, American Economic Association, vol. 94(3), pages 741-752, June.
    14. Tore Ellingsen & Magnus Johannesson, 2008. "Pride and Prejudice: The Human Side of Incentive Theory," American Economic Review, American Economic Association, vol. 98(3), pages 990-1008, June.
    15. Duffy, John & Kornienko, Tatiana, 2010. "Does competition affect giving?," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 82-103, May.
    16. repec:feb:framed:0087 is not listed on IDEAS
    17. Romano, Richard & Yildirim, Huseyin, 2001. "Why charities announce donations: a positive perspective," Journal of Public Economics, Elsevier, vol. 81(3), pages 423-447, September.
    18. Lacetera, Nicola & Macis, Mario, 2010. "Do all material incentives for pro-social activities backfire? The response to cash and non-cash incentives for blood donations," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 738-748, August.
    19. Anya Savikhin & Roman Sheremeta, 2010. "Visibility of Contributions and Cost of Information: An Experiment on Public Goods," Working Papers 10-22, Chapman University, Economic Science Institute.
    20. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
    21. John P. Conley & Fan‐Chin Kung, 2010. "Private Benefits, Warm Glow, and Reputation in the Free and Open Source Software Production Model," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(4), pages 665-689, August.
    22. 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.
    23. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    24. Gachter, Simon & Fehr, Ernst, 1999. "Collective action as a social exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 341-369, July.
    25. Patricia Funk, 2010. "Social Incentives and Voter Turnout: Evidence from the Swiss Mail Ballot System," Journal of the European Economic Association, MIT Press, vol. 8(5), pages 1077-1103, September.
    26. Charles Noussair & Steven Tucker, 2007. "Public Observability of Decisions and Voluntary Contributions in a Multiperiod Context," Public Finance Review, , vol. 35(2), pages 176-198, March.
    27. Rege, Mari & Telle, Kjetil, 2004. "The impact of social approval and framing on cooperation in public good situations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1625-1644, July.
    28. Jason Dana & Roberto Weber & Jason Kuang, 2007. "Exploiting moral wiggle room: experiments demonstrating an illusory preference for fairness," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 67-80, October.
    29. Xiaoquan (Michael) Zhang & Feng Zhu, 2011. "Group Size and Incentives to Contribute: A Natural Experiment at Chinese Wikipedia," American Economic Review, American Economic Association, vol. 101(4), pages 1601-1615, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Clingingsmith & Roman M. Sheremeta, 2018. "Status and the demand for visible goods: experimental evidence on conspicuous consumption," Experimental Economics, Springer;Economic Science Association, vol. 21(4), pages 877-904, December.
    2. Henry, Emeric & Sonntag, Jan, 2019. "Measuring image concern," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 19-39.
    3. Kessler, Judd B. & Low, Corinne & Singhal, Monica, 2021. "Social policy instruments and the compliance environment," Journal of Economic Behavior & Organization, Elsevier, vol. 192(C), pages 248-267.
    4. repec:hal:spmain:info:hdl:2441/1bq1k745nc834o1mcjvbqevsoq is not listed on IDEAS
    5. Christine Exley, 2018. "Incentives for Prosocial Behavior: The Role of Reputations," Management Science, INFORMS, vol. 64(5), pages 2460-2471, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bracha, Anat & Vesterlund, Lise, 2017. "Mixed signals: Charity reporting when donations signal generosity and income," Games and Economic Behavior, Elsevier, vol. 104(C), pages 24-42.
    2. Anya Savikhin Samek & Roman Sheremeta, 2014. "Recognizing contributors: an experiment on public goods," Experimental Economics, Springer;Economic Science Association, vol. 17(4), pages 673-690, December.
    3. Anya Savikhin & Roman Sheremeta, 2010. "Visibility of Contributions and Cost of Information: An Experiment on Public Goods," Working Papers 10-22, Chapman University, Economic Science Institute.
    4. Yann Algan & Yochai Benkler & Mayo Fuster Morell & Jérôme Hergueux, 2013. "Cooperation in Peer-Production Economy: Experimental Evidence from Wikipedia," SciencePo Working papers Main hal-03460797, HAL.
    5. Anya Samek & Roman Sheremeta, 2013. "Recognizing Contributors and Cost of Information: An Experiment on Public Goods," Artefactual Field Experiments 00430, The Field Experiments Website.
    6. repec:hal:spmain:info:hdl:2441/5ulf84sluc9vlb5mrjr32mfetg is not listed on IDEAS
    7. Yann Algan & Yochai Benkler & Mayo Fuster Morell & Jerome Hergueux, 2013. "Cooperation in Peer-Production Economy: Experimental Evidence from Wikipedia," Sciences Po publications info:hdl:2441/5ulf84sluc9, Sciences Po.
    8. Emel Filiz-Ozbay & Erkut Ozbay, 2014. "Effect of an audience in public goods provision," Experimental Economics, Springer;Economic Science Association, vol. 17(2), pages 200-214, June.
    9. Daniel Jones & Sera Linardi, 2014. "Wallflowers: Experimental Evidence of an Aversion to Standing Out," Management Science, INFORMS, vol. 60(7), pages 1757-1771, July.
    10. Manuel Foerster & Joel (J.J.) van der Weele, 2018. "Denial and Alarmism in Collective Action Problems," Tinbergen Institute Discussion Papers 18-019/I, Tinbergen Institute.
    11. Emel Filiz-Ozbay & Erkut Y. Ozbay, 2010. "Social Image in Public Goods Provision with Real Effort," Koç University-TUSIAD Economic Research Forum Working Papers 1026, Koc University-TUSIAD Economic Research Forum.
    12. Benabou, Roland & Jaroszewicz, Ania & Loewenstein, George, 2022. "It Hurts to Ask," IZA Discussion Papers 15576, Institute of Labor Economics (IZA).
    13. Henry, Emeric & Sonntag, Jan, 2019. "Measuring image concern," Journal of Economic Behavior & Organization, Elsevier, vol. 160(C), pages 19-39.
    14. repec:hal:spmain:info:hdl:2441/1bq1k745nc834o1mcjvbqevsoq is not listed on IDEAS
    15. Alexander L. Brown & Jonathan Meer & J. Forrest Williams, 2019. "Why Do People Volunteer? An Experimental Analysis of Preferences for Time Donations," Management Science, INFORMS, vol. 65(4), pages 1455-1468, April.
    16. Breitmoser, Yves & Vorjohann, Pauline, 2018. "Welfare-Based Altruism," Rationality and Competition Discussion Paper Series 89, CRC TRR 190 Rationality and Competition.
    17. Andersson, Per A. & Erlandsson, Arvid & Västfjäll, Daniel & Tinghög, Gustav, 2020. "Prosocial and moral behavior under decision reveal in a public environment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 87(C).
    18. Guttman, Joel M. & Goette, Lorenz, 2015. "Reputation, volunteering, and trust: Minimizing reliance on taste-based explanations," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 375-386.
    19. te Velde, Vera L., 2022. "Heterogeneous norms: Social image and social pressure when people disagree," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 319-340.
    20. Luca Zarri, 2013. "Altruism," Chapters, in: Luigino Bruni & Stefano Zamagni (ed.), Handbook on the Economics of Reciprocity and Social Enterprise, chapter 1, pages 9-19, Edward Elgar Publishing.
    21. Gary Bolton & Eugen Dimant & Ulrich Schmidt, 2018. "When a Nudge Backfires. Using Observation with Social and Economic Incentives to Promote Pro-Social Behavior," PPE Working Papers 0017, Philosophy, Politics and Economics, University of Pennsylvania.
    22. Roland Benabou & Armin Falk & Jean Tirole, 2018. "Narratives, Imperatives, and Moral Reasoning," Working Papers id:12918, eSocialSciences.

    More about this item

    Keywords

    charitable donations; lab experiments; status; crowding out;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedbwp:13-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Spozio (email available below). General contact details of provider: https://edirc.repec.org/data/frbbous.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.