Working Paper: NBER ID: w19082
Authors: Jonathan Meer
Abstract: A long literature has examined the effects of the price of giving - that is, the amount an in-dividual must give for one dollar to accrue to the charitable activity itself - on donative behavior. We use data from DonorsChoose.org, an online platform linking teachers with prospective donors, that are uniquely suited to addressing this question due to exogenous variation in overhead costs. An increased price of giving results in a lower likelihood of a project being funded. We also calculate the price elasticity of giving, finding estimates between -0.8 and -2; these are likely to be upper bounds on the tax price elasticity of charitable donations. Finally, we examine the effect of competition on giving and find that increased competition reduces the likelihood of a project being funded. These results provide insight into the workings of the market for charitable gifts.
Keywords: charitable giving; crowdfunding; price elasticity; competition
JEL Codes: D64; H41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| efficiency price of giving (D61) | likelihood of project funding (O22) |
| efficiency price of giving (D61) | price elasticity of giving (D64) |
| competition among similar charitable projects (L31) | likelihood of project funding (O22) |
| average price of competing projects (H43) | likelihood of project funding (O22) |