Does One Charitable Contribution Come At The Expense Of Another?

Reinstein, David A, (2011). Does One Charitable Contribution Come At The Expense Of Another?. The B.E. Journal Of Economic Analysis & Policy, 11, 1, .

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Type of evidence: Causal-observational (IV etc)

Related tools: Charities collaborate/compete?

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Paper summary

Data: 2001-2007 waves of the PSID/COPPS (annual then biennial), recall survey, loosely-defined cause categories

- Households that give more to one type of charity tend to give more to others.

- But many negative significant correlations between residuals from fixed-effects regressions

  1. Esp. for larger (prior) donors and for certain paired cause categories

- Plausible microeconomic and econometric assumptions $\rightarrow$ negative correlations are strong evidence of expenditure substitution

- Interpretation: heterogeneous motivations for giving, small vs large givers

Small donors may be mainly driven by temporary shocks and personal appeals, larger givers may have concave multi-charity warm-glow preferences.

This broadly agrees with findings from Dellavigna et al and Karlan and McConnell; but danger of ex-post comparisons

Discussion

Reinstein 2011 BEJEAP: PSID data, some evidence of expenditure substitution, particularly for large givers, but identification (bounding below) requires particular assumptions

Evaluation


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This paper has been added by David Reinstein

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