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Crowding In with Impure Altruism: Theory and Evidence from Volunteerism in National Parks

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Listed:
  • Matthew Kotchen
  • Katherine R.H. Wagner

Abstract

This paper makes three contributions to the literature on private provision of public goods. First, we identify limitations of the frequently used specification test that distinguishes between the standard models of pure and impure altruism based on the extent of crowding out. While the literature takes as given the result that crowding out should be less with impure altruism compared with pure altruism, we show that, in general, it can be either more or less. Second, we propose a more general test based on the presence of crowding in, rather than the extent of crowding out. Third, we provide empirical evidence. Using a unique panel data set on volunteerism in U.S. National Parks, we estimate the causal effect of changes in public funding within parks on the amount of within-park volunteerism. The overall finding is that each additional dollar of public expenditure crowds in 27 cents worth of volunteerism on average. We show how the estimates of crowding in, along with heterogeneity based on park and volunteer hour types, are theoretically consistent with the mainstay model of impure altruism.

Suggested Citation

  • Matthew Kotchen & Katherine R.H. Wagner, 2019. "Crowding In with Impure Altruism: Theory and Evidence from Volunteerism in National Parks," NBER Working Papers 26445, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26445
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    More about this item

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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