Working Paper: NBER ID: w24940
Authors: Daniel M. Hungerman; Mark Otto Wilhelm
Abstract: We present a new model of charitable giving where individuals regard out-of-pocket donations and the matches they induce as different. We show that match-price elasticities combine conventional price effects with the strength of warm-glow, so that a match-price elasticity alone is insufficient to characterize preferences for giving. Match- and rebate-price elasticities will typically be different, but together they lead to tests of underlying giving preferences. We estimate, for the first time, a match-price elasticity together with a real-world tax-based rebate elasticity in a non-laboratory high-stakes setting. The estimates reject extant models of giving, but are consistent with the new theory.
Keywords: charitable giving; donor preferences; elasticity; matching grants; rebates
JEL Codes: D64; H41; L31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Warm-glow utility (D11) | Donor preferences (D64) |
| Warm-glow utility (D11) | Effectiveness of interventions (I24) |
| Matching grants (H77) | Donations (D64) |
| Rebate mechanisms (H23) | Donations (D64) |
| Match-price elasticity (D40) | Donor preferences (D64) |
| Rebate-price elasticity (H23) | Donor preferences (D64) |