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Social Distance and Quality Ratings in Charity Choice

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  • Alexander L. Brown
  • Jonathan Meer
  • J. Forrest Williams

Abstract

We conduct a laboratory experiment to examine how third-party ratings impact charity choice and donative behavior, particularly in regards to preferences for local charities. Subjects are given a menu of ten charities, with a mix of local and non-local organizations included. We vary whether third-party ratings are displayed on this menu. Subjects perform an effort task to earn money and can choose to donate to their selected charity. We find evidence that subjects' choice of charity is impacted by third-party evaluations but, somewhat surprisingly, there are no obvious preferences for local charities. These third-party assessments have some impact on the percent of earnings that subjects allocate to their selected charity; local charities also accrue more donations, though these results are somewhat imprecise.

Suggested Citation

  • Alexander L. Brown & Jonathan Meer & J. Forrest Williams, 2014. "Social Distance and Quality Ratings in Charity Choice," NBER Working Papers 20182, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:20182
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    2. Paskalev, Zdravko & Yildirim, Huseyin, 2017. "A theory of outsourced fundraising: Why dollars turn into “Pennies for Charity”," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 1-18.
    3. Gallier, Carlo & Goeschl, Timo & Kesternich, Martin & Lohse, Johannes & Reif, Christiane & Römer, Daniel, 2019. "Inter-charity competition under spatial differentiation: Sorting, crowding, and spillovers," ZEW Discussion Papers 19-039, ZEW - Leibniz Centre for European Economic Research.
    4. Deck, Cary & Murphy, James J., 2019. "Donors change both their level and pattern of giving in response to contests among charities," European Economic Review, Elsevier, vol. 112(C), pages 91-106.
    5. Billur Aksoy & Silvana Krasteva, 2020. "When does less information translate into more giving to public goods?," Experimental Economics, Springer;Economic Science Association, vol. 23(4), pages 1148-1177, December.
    6. Adena, Maja & Alizade, Jeyhun & Bohner, Frauke & Harke, Julian & Mesters, Fabio, 2019. "Quality certification for nonprofits, charitable giving, and donor's trust: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 75-100.
    7. Karlan, Dean & List, John A., 2020. "How can Bill and Melinda Gates increase other people's donations to fund public goods?," Journal of Public Economics, Elsevier, vol. 191(C).
    8. Christine L. Exley, 2020. "Using Charity Performance Metrics as an Excuse Not to Give," Management Science, INFORMS, vol. 66(2), pages 553-563, February.
    9. Ross Hickey & Bradley Minaker & A. Abigail Payne, 2019. "The Sensitivity of Charitable Giving to the Timing and Salience of Tax Credits," National Tax Journal, National Tax Association;National Tax Journal, vol. 72(1), pages 79-110, March.
    10. Butera, Luigi & Houser, Daniel, 2018. "Delegating altruism: Toward an understanding of agency in charitable giving," Journal of Economic Behavior & Organization, Elsevier, vol. 155(C), pages 99-109.
    11. Gill, David & Prowse, Victoria, 2019. "Measuring costly effort using the slider task," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 1-9.
    12. Shachar Kariv & Daniel Lee & John List & Michael Price, 2016. "The Richness of Giving: Charity Selection and Charitable Gifts in a Large Field Experiment," Artefactual Field Experiments 00559, The Field Experiments Website.
    13. Colleen M. Boland & Corinna Ewelt-Knauer & Julia Schneider, 2022. "The gift that keeps on giving: corporate giving and excessive risk-taking," Journal of Business Economics, Springer, vol. 92(3), pages 355-396, April.
    14. Jonathan Oxley, 2020. "Examining Donor Preference for Charity Religious Affiliation," Working Papers wp2020_01_01, Department of Economics, Florida State University.
    15. Exley, Christine L. & Petrie, Ragan, 2018. "The impact of a surprise donation ask," Journal of Public Economics, Elsevier, vol. 158(C), pages 152-167.
    16. Portillo, Javier E. & Stinn, Joseph, 2018. "Overhead aversion: Do some types of overhead matter more than others?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 72(C), pages 40-50.
    17. Dittrich, Marcus & Mey, Bianka, 2021. "Giving time or giving money? On the relationship between charitable contributions," Journal of Economic Psychology, Elsevier, vol. 85(C).
    18. Gary Charness & Patrick Holder, 2019. "Charity in the Laboratory: Matching, Competition, and Group Identity," Management Science, INFORMS, vol. 65(3), pages 1398-1407, March.
    19. Chandrayee Chatterjee & James C. Cox & Michael K. Price & Florian Rundhammer, 2020. "Robbing Peter to Pay Paul: Understanding How State Tax Credits Impact Charitable Giving," NBER Working Papers 27163, National Bureau of Economic Research, Inc.
    20. Butera, Luigi & Horn, Jeffrey, 2020. "“Give less but give smart”: Experimental evidence on the effects of public information about quality on giving," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 59-76.
    21. Christine L. Exley, 2015. "Excusing Selfishness in Charitable Giving: The Role of Risk," Discussion Papers 15-013, Stanford Institute for Economic Policy Research.
    22. Qian Weng & Haoran He, 2018. "Geographic Distance, Income And Charitable Giving: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1145-1169, May.
    23. Chandrayee Chatterjee & James C. Cox & Michael K. Price & Florian Rundhammer, 2020. "Competition Among Charities: Field Experimental Evidence from a State Income Tax Credit for Charitable Giving," Experimental Economics Center Working Paper Series 2020-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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