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Unofficial Development Assistance: a model of development charities' donation income

  • Wiji Arulampalam

    ()

    (Department of Economics, University of Warwick)

  • Peter G. Backus

    ()

    (Department of Economics, University of Manchester)

  • John Micklewright

    ()

    (Department of Quantitative Social Science, Institute of Education, University of London)

The empirical literature on the determinants of charities' donation income, distinguishing the charitable cause, is small. We extend it by paying particular attention to development charities, capturing both charity and donor characteristics in a single framework. Using a newly constructed panel covering a quarter of a century, we observe a strong fundraising effect and a unitary household income elasticity. We find evidence that the conventionally identified 'price' effect may be the result of omitted variable bias rather than a genuine response of donors to perceived excesses in fundraising expenditure. Our results further suggest that public spending on development may affect private donations for development. We also find a positive spillover effect of fundraising, suggesting that the efforts of one development charity may increase contributions made to other development charities.

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Paper provided by Department of Quantitative Social Science - UCL Institute of Education, University College London in its series DoQSS Working Papers with number 13-14.

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Date of creation: 16 Oct 2013
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Handle: RePEc:qss:dqsswp:1314
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