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What do gifts buy? A model of philanthropy and tithing based on prestige and warm glow

Author

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  • William T. Harbaugh

    (Univ. of Oregon)

Abstract

Charities publicize the donations they receive, generally according to dollar categories rather than the exact amount. Donors in turn tend to give the minimum amount necessary to get into a category. These facts suggest that donors have a taste for having their donations made public. This paper models the effects of such a taste for "prestige" on the behavior of donors and charities. I show how charities can increase donations by using categories. The paper also shows conditions under which tithing, or reporting donations as percentages of income, can maximize donations, and examines the effect of a taste for prestige on competition between charities.

Suggested Citation

  • William T. Harbaugh, 1996. "What do gifts buy? A model of philanthropy and tithing based on prestige and warm glow," Public Economics 9606003, EconWPA.
  • Handle: RePEc:wpa:wuwppe:9606003
    Note: Type of Document - Word 6.0; prepared on IBM PC ; pages: 45; figures: included
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    References listed on IDEAS

    as
    1. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
    2. McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-663, May.
    3. 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.
    4. Hollander, Heinz, 1990. "A Social Exchange Approach to Voluntary Cooperation," American Economic Review, American Economic Association, vol. 80(5), pages 1157-1167, December.
    5. Andreoni, James, 1988. "Privately provided public goods in a large economy: The limits of altruism," Journal of Public Economics, Elsevier, vol. 35(1), pages 57-73, February.
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    Citations

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    Cited by:

    1. Russell James & Keely Jones, 2011. "Tithing and religious charitable giving in America," Applied Economics, Taylor & Francis Journals, vol. 43(19), pages 2441-2450.
    2. James Andreoni, 2006. "Leadership Giving in Charitable Fund-Raising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(1), pages 1-22, January.

    More about this item

    Keywords

    nonprofit; philanthropy; public goods; altruism; tithing;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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