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The Price of Warm Glow


  • Lilley, Andrew

    (University of Sydney)

  • Slonim, Robert

    () (University of Sydney)


This paper presents a model and experimental evidence to explain the "volunteering puzzle" where agents prefer volunteering time to donating money when monetary donations are, ceteris paribus, more efficient for providing resources to charity. In the model agents receive heterogeneous utility from pure and impure altruism (Andreoni 1989) that permits warm glow to vary between monetary donations and volunteering, thus allowing preferences for impure altruism to rationalize inefficient allocation decisions. We define a measure of the price of impure altruism as the additional proportion of income sacrificed by a donor to give in the dimension that maximizes her utility, holding the overall charitable contribution constant. To test the predictions of the model we ran an experiment in which we varied within-subjects the costs and benefits of monetary and volunteer donations. We also primed between-subjects the emphasis on the donation value to the charity (pure altruism) or the sacrifice to the donor (impure warm-glow altruism). Consistent with the model's predictions, the experiment shows that priming pure altruism increases the efficiency of donation choices, substitutability of donations between money and time and crowding out. Nonetheless, while greater impurity results in a more inefficient allocation of resources, empirically we find it increases overall charitable donations. We discuss the implications of our experimental results for both theory and policy.

Suggested Citation

  • Lilley, Andrew & Slonim, Robert, 2013. "The Price of Warm Glow," IZA Discussion Papers 7445, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7445

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    References listed on IDEAS

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    Cited by:

    1. Shaikh, Salman Ahmed, 2015. "Using Waqf as Social Safety Net & Funding Public Infrastructure," MPRA Paper 68751, University Library of Munich, Germany.
    2. Felipe A. Araujo & Erin Carbone & Lynn Conell-Price & Marli W. Dunietz & Ania Jaroszewicz & Rachel Landsman & Diego Lamé & Lise Vesterlund & Stephanie W. Wang & Alistair J. Wilson, 2016. "The slider task: an example of restricted inference on incentive effects," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 2(1), pages 1-12, May.
    3. repec:eee:joepsy:v:64:y:2018:i:c:p:57-72 is not listed on IDEAS
    4. repec:eee:jeborg:v:136:y:2017:i:c:p:45-62 is not listed on IDEAS
    5. Charness, Gary & Cobo-Reyes, Ramón & Sánchez, Ángela, 2016. "The effect of charitable giving on workers’ performance: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 61-74.
    6. repec:oup:apecpp:v:39:y:2017:i:3:p:499-515. is not listed on IDEAS
    7. Nelson, Katherine M. & Schlüter, Achim & Vance, Colin, 2016. "Funding conservation locally: Insights from behavioral experiments in Indonesia," Ruhr Economic Papers 652, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Müller, Stephan & Rau, Holger A., 2017. "Too cold for warm glow? Christmas-season effects in charitable giving," Center for European, Governance and Economic Development Research Discussion Papers 331, University of Goettingen, Department of Economics.
    9. Corazzini, Luca & Cotton, Christopher & Valbonesi, Paola, 2015. "Donor coordination in project funding: Evidence from a threshold public goods experiment," Journal of Public Economics, Elsevier, vol. 128(C), pages 16-29.

    More about this item


    laboratory experiments; altruism; warm glow; volunteering; monetary donations;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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