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Using willingness to pay to measure the strength of altruistic motives

Author

Listed:
  • Lata Gangadharan

    (Monash University, Department of Economics)

  • Philip J. Grossman

    (Monash University, Department of Economics)

  • Nina Xue

    (Monash University, Department of Economics)

Abstract

We introduce a novel experimental procedure to measure altruistic giving along a spectrum, from warm glow to pure altruism, by eliciting willingness to pay to increase the likelihood that a donation is received by a recipient. Whereas previous methods identify pure warm-glow motives, our approach directly measures altruistic preferences and is validated by a survey measure developed by Carpenter (2021). Participants who identify in the survey as altruistic givers are more likely to pay to increase the probability that the donation is implemented and pay more on average than those who identified as mainly motivated by warm glow.

Suggested Citation

  • Lata Gangadharan & Philip J. Grossman & Nina Xue, 2023. "Using willingness to pay to measure the strength of altruistic motives," Monash Economics Working Papers 2023-04, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2023-04
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    References listed on IDEAS

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    1. Korenok, Oleg & Millner, Edward L. & Razzolini, Laura, 2013. "Impure altruism in dictators' giving," Journal of Public Economics, Elsevier, vol. 97(C), pages 1-8.
    2. Tonin, Mirco & Vlassopoulos, Michael, 2013. "Experimental evidence of self-image concerns as motivation for giving," Journal of Economic Behavior & Organization, Elsevier, vol. 90(C), pages 19-27.
    3. Gangadharan, Lata & Grossman, Philip J. & Jones, Kristy & Leister, C. Matthew, 2018. "Paternalistic giving: Restricting recipient choice," Journal of Economic Behavior & Organization, Elsevier, vol. 151(C), pages 143-170.
    4. Andreoni, James & Serra-Garcia, Marta, 2021. "Time inconsistent charitable giving," Journal of Public Economics, Elsevier, vol. 198(C).
    5. Oleg Korenok & Edward Millner & Laura Razzolini, 2014. "Taking, giving, and impure altruism in dictator games," Experimental Economics, Springer;Economic Science Association, vol. 17(3), pages 488-500, September.
    6. Andrew Luccasen & Philip J. Grossman, 2017. "Warm-Glow Giving: Earned Money And The Option To Take," Economic Inquiry, Western Economic Association International, vol. 55(2), pages 996-1006, April.
    7. 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.
    8. 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.
    9. Crumpler, Heidi & Grossman, Philip J., 2008. "An experimental test of warm glow giving," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1011-1021, June.
    10. Mark Ottoni-Wilhelm & Lise Vesterlund & Huan Xie, 2017. "Why Do People Give? Testing Pure and Impure Altruism," American Economic Review, American Economic Association, vol. 107(11), pages 3617-3633, November.
    11. Chen, Daniel L. & Schonger, Martin & Wickens, Chris, 2016. "oTree—An open-source platform for laboratory, online, and field experiments," Journal of Behavioral and Experimental Finance, Elsevier, vol. 9(C), pages 88-97.
    12. Null, C., 2011. "Warm glow, information, and inefficient charitable giving," Journal of Public Economics, Elsevier, vol. 95(5), pages 455-465.
    13. Carpenter, Jeffrey, 2021. "The shape of warm glow: Field experimental evidence from a fundraiser," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 555-574.
    14. Gandullia, Luca & Lezzi, Emanuela & Parciasepe, Paolo, 2020. "Replication with MTurk of the experimental design by Gangadharan, Grossman, Jones & Leister (2018): Charitable giving across donor types," Journal of Economic Psychology, Elsevier, vol. 78(C).
    15. Null, C., 2011. "Warm glow, information, and inefficient charitable giving," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 455-465, June.
    16. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March.
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    Cited by:

    1. Nathan W. Chan & Stephen Knowles & Ronald Peeters & Leonard Wolk, 2024. "Cost-(in)effective public good provision: an experimental exploration," Theory and Decision, Springer, vol. 96(3), pages 397-442, May.

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    More about this item

    Keywords

    warm glow; altruism; donation; charitable giving; experiment;
    All these keywords.

    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods

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