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Charitable Giving as a Gift Exchange - Evidence from a Field Experiment

  • Armin Falk

This study reports data from a field experiment that was conducted to investigate the relevance of gift-exchange for charitable giving. Roughly 10,000 solicitation letters were sent to potential donors in the experiment. One third of the letters contained no gift, one third contained a small gift and one third contained a large gift. Whether a potential donor received a letter with or without a gift was randomly determined. We observe strong and systematic effects from including gifts. Compared to the no gift condition, the relative frequency of donations increased by 17 percent if a small gift was included and by 75 percent for a large gift. Consequently, including gifts was highly profitable for the charitable organization. The contribution of this paper is twofold: first, it shows that reciprocity is an important motive for charitable giving, in addition to the warm-glow motive. Second, the paper confirms the economic relevance of reciprocity by using field data. This extends the current body of research on reciprocity, which is almost exclusively confined to laboratory studies.

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Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 168.

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Handle: RePEc:zur:iewwpx:168
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  1. Ernst Fehr & Simon G�chter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
  2. James Andreoni, 1997. "Warm-glow versus cold-prickle: the effect of positive and negative framing on cooperation in experiments," Levine's Working Paper Archive 671, David K. Levine.
  3. David Lucking-Reiley & John List, 2002. "The effects of seed money and refunds on charitable giving: Experimental evidence from a university capital campaign," Natural Field Experiments 00301, The Field Experiments Website.
  4. 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 1447-58, December.
  5. Fehr, Ernst & Kirchsteiger, George & Riedl, Arno, 1993. "Does Fairness Prevent Market Clearing? An Experimental Investigation," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 437-59, May.
  6. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  7. repec:att:wimass:9406 is not listed on IDEAS
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