Hostname: page-component-5cf477f64f-r2nwp Total loading time: 0 Render date: 2025-04-04T07:27:13.666Z Has data issue: false hasContentIssue false
  • English
  • Français

Dimensions of donation preferences: the structure of peer and income effects

Published online by Cambridge University Press:  14 March 2025

Michalis Drouvelis Open the ORCID record for Michalis Drouvelis [Opens in a new window]  and
Benjamin M. Marx
Michalis Drouvelis*
Affiliation:
Department of Economics, University of Birmingham, Edgbaston, Birmingham B15 2TT, UK CESifo, Munich, Germany
Benjamin M. Marx*
Affiliation:
Department of Economics, University of Illinois, 214 David Kinley Hall, MC-707 1407 W. Gregory, Urbana, IL 61801, USA
*
[email protected]
[email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Charitable donations provide positive externalities and can potentially be increased with an understanding of donor preferences. We obtain a uniquely comprehensive characterization of donation motives using an experiment that varies treatments between and within subjects. Donations are increasing in peers’ donations and past subjects’ donations. These and other results suggest a model of heterogeneous beliefs about the social norm for giving. Estimation of such a model reveals substantial heterogeneity in subjects’ beliefs about and adherence to the norm. A simple fundraising strategy increases donations by an estimated 30% by exploiting previously unstudied correlations between dimensions of donor preferences.

Keywords

CharitableDonationAltruismWarm glowSocial preferencesPeer effectsExperiment

JEL classification

D64: Altruism • Philanthropy • Intergenerational Transfers A13: Relation of Economics to Social Values D01: Microeconomic Behavior: Underlying Principles
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 1 , March 2021 , pp. 274 - 302
Copyright
Copyright © 2020 Economic Science 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.)

Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09661-z) contains supplementary material, which is available to authorized users.

We are grateful to the Birmingham–Illinois Partnership for Discovery, Engagement, and Education for research support. We thank Masaki Aoyagi, Antonio Cabrales, Gary Charness, Tongzhe Li, Mark Ottoni-Wilhelm, Michael Price, Aldo Rustichini, Kimberley Scharf, and seminar participants at the University of Illinois, the University of Southern California, the University of Windsor, the 2017 Annual Conference of the International Institute for Public Finance, the 2017 Association for Research on Nonprofit Organizations and Voluntary Action, Behavioral Exchange 2017, the 2017 Nordic Conference on Behavioural and Experimental Economics, the 2018 Annual Meeting of the Southern Economic Association, and the 2019 Annual Meeting of the American Economic Association for helpful comments. Yuci Chen provided excellent research assistance.

References

Alcott, H (2011). Social norms and energy conservation. Journal of Public Economics, 95, 1082–1095.CrossRefGoogle Scholar
Allcott, H, & Kessler, JB (2019). The welfare effects of nudges: A case study of energy use social comparisons. American Economic Journal: Applied Economics, 11(1), 236–76.Google Scholar
Andreoni, J (1989). Giving with impure altruism: Applications to charity and Ricardian equivalence. The Journal of Political Economy, 97(6), 1447–1458.CrossRefGoogle Scholar
Andreoni, J (2006). Leadership giving in charitable fund-raising. Journal of Public Economic Theory, 8(1), 1–22.CrossRefGoogle Scholar
Andreoni, J (2006). Philanthropy. Handbook on the Economics of Giving, Reciprocity and Altruism, 1, 1201–1269.CrossRefGoogle Scholar
Andreoni, J, & Payne, AA (2013). Chapter 1: Charitable giving. Handbook of Public Economics, 5, 1–50.CrossRefGoogle Scholar
Andreoni, J, & Bernheim, DB (2009). Social image and the 50–50 norm: A theoretical and experimental analysis of audience effects. Econometrica, 77, 1607–1636.Google Scholar
Andreoni, J, & Miller, J (2002). Giving according to GARP: An experimental test of the consistency of preferences for altruism. Econometrica, 70(2), 737–753.CrossRefGoogle Scholar
Andreoni, J, Rao, JM, & Trachtman, H (2017). Avoiding the ask: A field experiment on altruism, empathy, and charitable giving. Journal of Political Economy, 125(3), 625–653.CrossRefGoogle Scholar
Ariely, D, Bracha, A, & Meier, S (2009). Doing good or doing well? Image motivation and monetary incentives in behaving prosocially. American Economic Review, 99, 544–555.CrossRefGoogle Scholar
Bayer, P, Hjalmarsson, R, & Pozen, D (2009). Building criminal capital behind bars: Peer effects in juvenile corrections. The Quarterly Journal of Economics, 124(1), 105–147.CrossRefGoogle Scholar
Bracha, A, Menietti, M, & Vesterlund, L (2011). Seeds to succeed?: Sequential giving to public projects. Journal of Public Economics, 95(5), 416–427.CrossRefGoogle Scholar
Brown, AL, Meer, J, & Forrest Williams, J (2019). Why do people volunteer? An experimental analysis of preferences for time donations. Management Science, 65(4), 1455–1468.CrossRefGoogle Scholar
Bursztyn, L, Ederer, F, Ferman, B, & Yuchtman, N (2014). Understanding mechanisms underlying peer effects: Evidence from a field experiment on financial decisions. Econometrica, 82(4), 1273–1301.Google Scholar
Cagala, T., Glogowsky, U., & Rincke, J. (2020). Who to target in fund-raising? A field experiment on gift exchange. Mimeo.Google Scholar
Cai, J, & Szeidl, A (2018). Interfirm Relationships and Business Performance. Quarterly Journal of Economics, 133(3), 1229–1282.CrossRefGoogle Scholar
Carlsson, F, He, H, & Martinsson, P (2013). Easy come, easy go-the role of windfall money in lab and field experiments. Experimental Economics, 16, 190–207.CrossRefGoogle Scholar
Carrell, SE, Sacerdote, BI, & West, JE (2013). From natural variation to optimal policy? The importance of endogenous peer group formation. Econometrica, 81(3), 855–882.Google Scholar
Castillo, M, Petrie, R, & Wardell, C (2014). Fundraising through online social networks: A field experiment on peer-to-peer solicitation. Journal of Public Economics, 114, 29–35.CrossRefGoogle Scholar
Castillo, M., Petrie, R., & Wardell, C. (2017). Friends asking friends for charity: The importance of gifts and audience. http://www.raganpetrie.org/uploads/8/4/4/3/84436206/friends_asking_friends_aug2017_final.pdf.Google Scholar
Cherry, TL, & Shogren, JF (2008). Self-interest, sympathy and the origin of endowments. Economics Letters, 101(1), 69–72.CrossRefGoogle Scholar
Cherry, TL, Shogren, JF, Frykblom, P, & Shogren, JF (2002). Hardnose the dictator. American Economic Review, 92(4), 1218–1221.CrossRefGoogle Scholar
Cherry, TL, Shogren, JF, Kroll, S, & Shogren, JF (2005). The impact of endowment heterogeneity and origin on public good contributions: Evidence from the lab. Journal of Economic Behavior and Organization, 57(3), 357–365.CrossRefGoogle Scholar
Corgnet, B, Espín, AM, & Hernán-González, R (2015). The cognitive basis of social behavior: Cognitive reflection overrides antisocial but not always Prosocial motives. Frontiers in Behavioral Neuroscience, 9, 287.CrossRefGoogle Scholar
Croson, RTA (2008). Differentiating altruism and reciprocity. Handbook of Experimental Economics Results, 1, 784–791.CrossRefGoogle Scholar
Crumpler, H, & Grossman, PJ (2008). An experimental test of warm glow giving. Journal of Public Economics, 92(5–6), 1011–1021.CrossRefGoogle Scholar
Dahl, GB, Løken, KV, & Mogstad, M (2014). Peer effects in program participation. American Economic Review, 104(7), 2049–74.CrossRefGoogle Scholar
Deb, R, Gazzale, RS, & Kotchen, MJ (2014). Testing motives for charitable giving: A revealed-preference methodology with experimental evidence. Journal of Public Economics, 120, 181–192.CrossRefGoogle Scholar
DellaVigna, S, List, JA, & Malmendier, U (2012). Testing for altruism and social pressure in charitable giving. The Quarterly Journal of Economics, 127(1), 1–56.CrossRefGoogle ScholarPubMed
Drouvelis, M., Isen, A., & Marx, B. M. (2019). The bonus-income donation norm. In CESifo working paper No. 7961.CrossRefGoogle Scholar
Drouvelis, M, Marx, BM, & Marx, BM (2018). Prosociality spillovers of working with others. Journal of Economic Behavior and Organization, 155, 205–216.CrossRefGoogle Scholar
Duflo, E, Dupas, P, & Kremer, M (2011). Peer effects, teacher incentives, and the impact of tracking: Evidence from a randomized evaluation in Kenya. American Economic Review, 101(5), 1739–74.CrossRefGoogle Scholar
Eckel, C, Herberich, D, Meer, J Scharf, K, & Tonin, M (2018). It’s not the thought that counts: A field experiment on gift exchange at a public university. The economics of philanthropy, Cambridge: MIT Press.Google Scholar
Elfenbein, DW, Fisman, R, & McManus, B (2012). Charity as a substitute for reputation: Evidence from an online marketplace. Review of Economic Studies, 79(4), 1441–1468.CrossRefGoogle Scholar
Elster, J (1989). Social norms and economic theory. Journal of Economic Perspectives, 3(4), 99–117.CrossRefGoogle Scholar
Epple, D., & Romano, R. E. (2011). Peer effects in education: A survey of the theory and evidence. In Handbook of social economics, Vol. 1 (pp. 1053–1163). Elsevier.Google Scholar
Erkal, N, Gangadharan, L, & Nikiforakis, N (2011). Relative earnings and giving in a real-effort experiment. The American Economic Review, 101(7), 3330–3348.CrossRefGoogle Scholar
Falk, A (2007). Gift exchange in the field. Econometrica, 75(5), 1501–1511.CrossRefGoogle Scholar
Filiz-Ozbay, E, & Ozbay, EY (2014). Effect of an audience in public goods provision. Experimental Economics, 17(2), 200–214.CrossRefGoogle Scholar
Fischbacher, U, Gächter, S, & Fehr, E (2001). Are people conditionally cooperative? Evidence fro a public goods experiment. Economics Letters, 71, 397–404.CrossRefGoogle Scholar
Fisman, R, Kariv, S, & Markovits, D (2007). Individual preferences for giving. American Economic Review, 97(5), 1858–1876.CrossRefGoogle Scholar
Frederick, S (2005). Cognitive reflection and decision making. Journal of Economic Perspectives, 19(4), 25–42.CrossRefGoogle Scholar
Gächter, S Frey, BS, & Stutzer, A (2007). Conditional cooperation. Behavioral regularities from the lab and the field and their policy implications. Economics and Psychology. A promising new cross-disciplinary field: CESifo Seminar Series, Cambridge: The MIT Press.Google Scholar
Gangadharan, L, Grossman, PJ, Jones, K, & Matthew Leister, C (2018). Paternalistic giving: Restricting recipient choice. Journal of Economic Behavior and Organization, 151, 143–170.CrossRefGoogle Scholar
Glazer, A, & Konrad, KA (1996). A signaling explanation for charity. The American Economic Review, 86(4), 1019–1028.Google Scholar
Gneezy, U, & Rustichini, A (2000). A fine is a price. The Journal of Legal Studies, 29(1), 1–17.CrossRefGoogle Scholar
Gneezy, U, & Rustichini, A (2000). Pay enough or don’t pay at all. Quarterly Journal of Economics, 115, 791–810.CrossRefGoogle Scholar
Harrison, GW (2007). House money effects in public good experiments: Comment. Experimental Economics, 10(4), 429–437.CrossRefGoogle Scholar
Herbst, D, & Mas, A (2015). Peer effects on worker output in the laboratory generalize to the field. Science, 350(6260), 545–549.CrossRefGoogle ScholarPubMed
Hermalin, B (1998). Toward an economic theory of leadership: Leading by example. American Economic Review, 88(5), 1188–1206.Google Scholar
Hjort, J (2014). Ethnic divisions and production in firms. The Quarterly Journal of Economics, 129(4), 1899–1946.CrossRefGoogle Scholar
Huck, S, & Rasul, I (2011). Matched fundraising: Evidence from a natural field experiment. Journal of Public Economics, 95, 351–362.CrossRefGoogle Scholar
Huck, S, Rasul, I, & Shephard, A (2015). Comparing charitable fundraising schemes: Evidence from a field experiment and a structural model. American Economic Journal: Economic Policy, 7(2), 326–69.Google Scholar
Imberman, SA, Kugler, AD, & Sacerdote, BI (2012). Katrina’s children: Evidence on the structure of peer effects from hurricane evacuees. American Economic Review, 102(5), 2048–82.CrossRefGoogle Scholar
Karlan, D, & Wood, DH (2017). The effect of effectiveness: Donor response to aid effectiveness in a direct mail fundraising experiment. Journal of Behavioral and Experimental Economics, 66, 1–8.CrossRefGoogle Scholar
Karlan, D., & List, J. A. (2012). How can bill and melinda gates increase other people’s donations to fund public goods? In NBER working paper no. 17954.Google Scholar
Kessler, JB (2017). Announcements of support and public good provision. American Economic Review, 107(12), 3760–3787.CrossRefGoogle Scholar
Korenok, O, Millner, EL, & Razzolini, L (2013). Impure altruism in dictators’ giving. Journal of Public Economics, 97, 1–8.CrossRefGoogle Scholar
Kroll, S, Cherry, TL, & Shogren, JF (2007). The impact of endowment heterogeneity and origin on contributions in best-shot public good games. Experimental Economics, 10(4), 411–428.CrossRefGoogle Scholar
Krupka, EL, & Croson, RTA (2016). The differential impact of social norms cues on charitable contributions. Journal of Economic Behavior and Organization, 128, 149–158.CrossRefGoogle Scholar
Krupka, EL, & Weber, RA (2013). Identifying social norms using coordination games: Why does dicator game sharing vary?. Journal of the European Economic Association, 11(3), 495–524.CrossRefGoogle Scholar
Landry, CE, Lange, A, List, JA, Price, MK, & Rupp, NG (2006). Toward an understanding of the economics of charity: Evidence from a field experiment. The Quarterly Journal of Economics, 121(2), 747–782.CrossRefGoogle Scholar
Lilley, A, & Slonim, R (2014). The price of warm glow. Journal of Public Economics, 114, 58–74.CrossRefGoogle Scholar
Lim, J., & Meer, J. (2019). Persistent effects of teacher-student gender matches. Journal of Human Resources. https://doi.org/10.3368/jhr.55.3.0218-9314R4.CrossRefGoogle Scholar
List, JA (2011). The market for charitable giving. Journal of Economic Perspectives, 25(2), 157–180.CrossRefGoogle Scholar
List, JA, & Lucking-Reiley, D (2002). The effects of seed money and refunds on charitable giving: Experimental evidence from a university capital campaign. Journal of Political Economy, 110, 215–233.CrossRefGoogle Scholar
Manski, CF (1993). Identification of endogenous social effects: The reflection problem. The Review of Economic Studies, 60(3), 531–542.CrossRefGoogle Scholar
Meer, J (2011). Brother, can you spare a dime? Peer pressure in charitable solicitation. Journal of Public Economics, 95(7–8), 926–941.CrossRefGoogle Scholar
Meer, J, & Rosen, H (2011). The ABCs of charitable solicitation. Journal of Public Economics, 95(5–6), 363–371.CrossRefGoogle Scholar
Niederle, M, & Vesterlund, L (2010). Explaining the gender gap in math test scores: The role of competition. Journal of Economic Perspectives, 24(2), 129–44.CrossRefGoogle Scholar
Ostrom, E (2000). Collective action and the evolution of social norms. Journal of Economic Perspectives, 14(3), 137–158.CrossRefGoogle Scholar
Ottoni-Wilhelm, M, Vesterlund, L, & Xie, H (2017). Why do people give? Testing pure and impure altruism. American Economic Review, 107(11), 3617–3633.CrossRefGoogle Scholar
Potters, J, Sefton, M, & Vesterlund, L (2007). Leading-by-example and signaling in voluntary contribution games: An experimental study. Economic Theory, 33(1), 169–182.CrossRefGoogle Scholar
Reinstein, D, & Riener, G (2012). Reputation and influence in charitable giving: An experiment. Theory and Decision, 72(2), 221–243.CrossRefGoogle Scholar
Schokkaert, E (2006). The empirical analysis of transfer motives. Handbook of the Economics of Giving, Altruism and Reciprocity, 1, 127–181.CrossRefGoogle Scholar
Shang, J, & Croson, R (2009). A field experiment in charitable contribution: the impact of social information on the voluntary provision of public goods. Economic Journal, 119, 1422–1439.CrossRefGoogle Scholar
Sieg, H, & Zhang, J (2012). The effectiveness of private benefits in fundraising of local charities. International Economic Review, 53(2), 349–374.CrossRefGoogle Scholar
Smith, S, Windmeijer, F, & Wright, E (2013). Peer effects in charitable giving: evidence from the (running) field. The Economic Journal, 125, 1053–1071.CrossRefGoogle Scholar
Tibshirani, R (1996). Regression shrinkage and selection via the lasso. Journal of the Royal Statistical Society Series B (Methodological), 58, 267–288.CrossRefGoogle Scholar
Tonin, M, & Vlassopoulos, M (2017). Sharing one’s fortune? An experimental study on earned income and giving. Journal of Behavioral and Experimental Economics, 66, 112–118.CrossRefGoogle Scholar
Vesterlund, L (2003). The informational value of sequential fundraising. Journal of Public Economics, 87(3), 627–657.CrossRefGoogle Scholar
Vesterlund, L Kagel, J, & Roth, A (2016). Using experimental methods to understand why and how we give to charity. The handbook of experimental economics, Princeton: Princeton University Press.Google Scholar
Waldinger, F (2012). Peer effects in science: Evidence from the dismissal of scientists in Nazi Germany. The Review of Economic Studies, 79(2), 838–861.CrossRefGoogle Scholar
www.engageforgood.com (2017). America’s Charity Checkout Champions.Google Scholar
Zizzo, DJ (2010). Experimenter demand effects in economic experiments. Experimental Economics, 13(1), 75–98.CrossRefGoogle Scholar
Supplementary material: File

Drouvelis and Marx supplementary material

Drouvelis and Marx supplementary material
Download Drouvelis and Marx supplementary material(File)
File 16.4 MB