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Insuring Your Donation – An Experiment

Author

Listed:
  • Renate Buijze

    (Erasmus University Rotterdam (EUR) - Erasmus School of Law)

  • Christoph Engel

    () (Max Planck Institute for Research on Collective Goods, Bonn)

  • Sigrid Hemels

    (Erasmus University Rotterdam (EUR) - Erasmus School of Law)

Abstract

An increasing fraction of donations is channeled through donation intermediaries. These entities serve multiple purposes, one of which seems to be providing donors with greater certainty: that the donation reaches its intended goal, and that the donor may be sure to get a tax benefit. We interpret this function as insurance and test the option to insure donations in the lab. Our participants indeed have a positive willingness to pay for insurance against either risk. Yet the insurance option is only critical for their willingness to donate to a charity if the uncertainty affects the proper use of their donation.

Suggested Citation

  • Renate Buijze & Christoph Engel & Sigrid Hemels, 2015. "Insuring Your Donation – An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2015_16, Max Planck Institute for Research on Collective Goods, revised Jul 2016.
  • Handle: RePEc:mpg:wpaper:2015_16
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    File URL: http://www.coll.mpg.de/pdf_dat/2015_16online.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Insurance; charity; Donation; donation intermediary;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship

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