Hostname: page-component-78c5997874-v9fdk Total loading time: 0 Render date: 2024-11-02T18:46:14.565Z Has data issue: false hasContentIssue false
  • English
  • Français

Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

Published online by Cambridge University Press:  15 September 2016

Koji Kotani ,
Kent D. Messer  and
William D. Schulze
Koji Kotani
Affiliation:
International Development Program in the Graduate School of International Relations at the International University of Japan in Niigata, Japan
Kent D. Messer
Affiliation:
Department of Food and Resource Economics and the Department of Economics at the University of Delaware in Newark, Delaware
William D. Schulze
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
Get access

Abstract

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand” social preference should be counted in benefit-cost analysis.

Keywords

matching grantspublic goodscharitable givingvoluntary contributionsexperimental economicswarm glowhelping hand
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 39 , Issue 2 , April 2010 , pp. 324 - 343
Copyright
Copyright © 2010 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, S.P., Goeree, J.K., and Holt, C.A. 1998. “A Theoretical Analysis of Altruism and Decision Error in Public Goods Games.” Journal of Public Economics 70(2): 297–323.CrossRefGoogle Scholar
Andreoni, J. 1988. “Privately Provided Public Goods in a Large Economy: The Limits of Altruism.” Journal of Public Economics 35(1): 57–73.CrossRefGoogle Scholar
Andreoni, J. 1989. “Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence.” Journal of Political Economy 97(6): 1447–1558.CrossRefGoogle Scholar
Andreoni, J. 1995. “Cooperation in Public-Goods Experiments: Kindness or Confusion?” American Economic Review 85(4): 891–904.Google Scholar
Andreoni, J. 2006. “Philanthropy.” In Kolm, S. and Ythier, J., eds., Handbook of the Economics of Giving, Altruism and Reciprocity. Amsterdam: Elsevier.Google Scholar
Andreoni, J., and Miller, J. 2002. “Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism.” Econometrica 70(2): 737–753.Google Scholar
Bateman, I.J., Cole, M., Cooper, P., Georgiou, S., Hadley, D., and Poe, G.L. 2004. “On Visible Choice Sets and Scope Sensitivity.” Journal of Environmental Economics and Management 47(1): 71–93.Google Scholar
Brekke, K.A., Kverndokk, S., and Nyborg, K. 2003. “An Economic Model of Moral Motivation.” Journal of Public Economics 87(9/10): 1967–1983.CrossRefGoogle Scholar
Brosig, J., Weimann, J., and Ockenfels, A. 2003. “The Effect of Communication Media on Cooperation.” German Economic Review 4(2): 217–230.Google Scholar
Buchinsky, M. 1998. “Recent Advances in Quantile Regression Models: A Practical Guideline for Empirical Research.” Journal of Human Resources 33(1): 88–126.CrossRefGoogle Scholar
Cadsby, C.B., and Maynes, E. 1999. “Voluntary Provision of Threshold Public Goods with Continuous Contributions: Experimental Evidence.” Journal of Public Economics 71(1): 53–73.CrossRefGoogle Scholar
Charness, G., and Rabin, M. 2002. “Understanding Social Preferences with Simple Tests.” Quarterly Journal of Economics 117(3): 817–869.CrossRefGoogle Scholar
Davis, D.D., and Holt, C.A. 1992. Experimental Economics. Princeton, NJ: Princeton University Press.Google Scholar
Dawes, R.M., McTavish, J., and Shaklee, H. 1977. “Behavior, Communication, and Assumptions about Other People's Behavior in a Common Dilemma Situation.” Journal of Personality and Social Psychology 35(1): 1–11.Google Scholar
Eckel, C.C., and Grossman, P.J. 2003. “Rebate versus Matching: Does How We Subsidize Charitable Contributions Matter?” Journal of Public Economics 87(3/4): 681–701.CrossRefGoogle Scholar
Eckel, C.C., and Grossman, P.J. 2008. “Subsidizing Charitable Contributions: A Natural Field Experiment Comparing Matching and Rebate Subsidies.” Experimental Economics 11(3): 234–252.Google Scholar
Elster, J. 1989. The Cement of Society: A Study of Social Order. New York: Cambridge University Press.Google Scholar
Falkinger, J., Fehr, E., Gachter, S., and Winter-Ebmer, R. 2000. “A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence.” American Economic Review 90(1): 247–264.Google Scholar
Frey, B.S., and Oberholzer-Gee, F. 1997. “The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out.” American Economic Review 87(4): 746–755.Google Scholar
Giving USA Foundation. 2009. “The Annual Report on Philanthropy for the Year 2008.” The Center for Philanthropy at Indiana University, Bloomington, IN.Google Scholar
Goeree, J.K., Holt, C.A., and Laury, S.K. 2002. “Private Costs and Public Benefits: Unraveling the Effects and Noisy Behavior.” Journal of Public Economics 83(2): 255–276.CrossRefGoogle Scholar
Huber, B., and Runkel, M. 2006. “Optimal Design of Intergovernmental Grants under Asymmetric Information.” International Tax and Public Finance 13(1): 25-11.Google Scholar
Jung, S. 1996. “Quasi-Likelihood for Median Regression Models.” Journal of the American Statistical Association 91(433): 251–257.Google Scholar
Kahneman, D., and Knetsch, J.L. 1992. “Valuing Public Goods: The Purchase of Moral Satisfaction.” Journal of Environmental Economics and Management 22(1): 57–70.CrossRefGoogle Scholar
Karlan, D., and List, J.A. 2007. “Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment.” American Economic Review 97(5): 1774–1793.Google Scholar
Koenker, R., and Bassett, B. Jr. 1978. “Regression Quantile.” Econometrica 46(1): 33–50.Google Scholar
Landry, C.E., Lange, A., List, J.A., Price, M.K., and Rupp, N.G. 2006. “Toward an Understanding of the Economics of Charity: Evidence from a Field Experiment.” Quarterly Journal of Economics 121(2): 747–782.Google Scholar
Ledyard, J.O. 1995. “Public Goods: A Survey of Experimental Research.” In Kagel, J.H. and Roth, A.E., eds., Handbook of Experimental Economics. Princeton, NJ: Princeton University Press.Google Scholar
Lipsitz, S.R., Fitzmaurice, G.M., Molenberghs, G., and Zhao, L.P. 1997. “Quantile Regression Methods for Longitudinal Data with Drop-Outs: Application to CD4 Cell Counts of Patients Infected with the Human Immunodeficiency Virus.” Applied Statistics 46(4): 463–476.Google Scholar
McCloskey, D.N., and Ziliak, S.T. 1996. “The Standard Error of Regressions.” Journal of Economic Literature 34(1): 97–114.Google Scholar
Messer, K.D., and Allen, W. Forthcoming. “Applying Optimization and the Analytic Hierarchy Process to Enhance Agricultural Preservation Strategies in the State of Delaware.” Agricultural and Resource Economics Review.Google Scholar
Messer, K.D., Kaiser, H.M., and Schulze, W.D. 2008. “The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab.” American Journal of Agricultural Economics 90(2): 540–552.Google Scholar
Messer, K.D., Poe, G.L., Rondeau, D., Schulze, W.D., and Vossler, C.A. 2010. “Exploring Voting Anomalies Using a Demand Revealing Random Price Voting Mechanism.” Journal of Public Economics 94(3/4): 308–317.CrossRefGoogle Scholar
Messer, K., Zarghamee, H., Kaiser, H., and Schulze, W. 2007. “New Hope for the Voluntary Contribution Mechanism: The Effects of Framing and Context.” Journal of Public Economics 91(9): 1783–1799.Google Scholar
Palfrey, T.R., and Prisbrey, J.E. 1997. “Anomalous Behavior in Public Goods Games: How Much and Why?” American Economic Review 87(5): 829–846.Google Scholar
Peloza, J., and Steel, P. 2005. “The Price Elasticities of Charitable Contributions: A Meta-Analysis.” Journal of Public Policy and Marketing 24(2): 260–272.CrossRefGoogle Scholar
Randolph, W.C. 1995. “Dynamic Income, Progressive Taxes and the Timing of Charitable Contributions.” Journal of Political Economy 103(4): 709–738.CrossRefGoogle Scholar
Rondeau, D., and List, J.A. 2008. “Matching and Challenge Gifts to Charity: Evidence from Laboratory and Natural Field Experiment.” Experimental Economics 11(3): 253–267.Google Scholar
Rondeau, D., Poe, G.L., and Schulze, W.D. 2005. “VCM or PPM? A Comparison of the Efficiency Properties of Two Voluntary Public Goods Mechanisms.” Journal of Public Economics 89(8): 1581–1592.CrossRefGoogle Scholar
Rondeau, D., Schulze, W.D., and Poe, G.L. 1999. “Voluntary Revelation of the Demand for Public Goods Using a Provision Point Mechanism.” Journal of Public Economics 72(3): 455–470.Google Scholar
Roodman, D., and Standley, S. 2006. “Tax Policies to Promote Private Charitable Giving in DAC Countries.” Working Paper No. 82, Center for Global Development, Washington, D.C.Google Scholar
Saijo, T., and Nakamura, H. 1995. “The Spite Dilemma in Voluntary Contribution Mechanism Experiments.” Journal of Conflict Resolution 39(3): 535–560.Google Scholar
Schelling, T.C. 1981. The Strategy of Conflict. Boston, MA: Harvard University Press.Google Scholar
Schulze, W.D., Poe, G.L., Bateman, I., and Rondeau, D. 2002. “Is the Scope Test Meaningful in the Presence of Other Regarding Behavior?” In List, J.A. and deZeeuw, A., eds., Recent Advances in Environmental Economics. Northampton, MA: Edward Elgar.Google Scholar
Smith, V. 1992. “Comment: Arbitrary Values, Good Causes and Premature Verdicts.” Journal of Environmental Economics and Management 22(1): 71–89.Google Scholar
Ziliak, S.T., and McCloskey, D.N. 2004. “Size Matters: The Standard Error of Regressions.” Journal of Socio-Economics 33(5): 527–546.Google Scholar