Impure Impact Giving: Theory and Evidence
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.
Published Versions
Daniel M. Hungerman & Mark Ottoni-Wilhelm, 2021. "Impure Impact Giving: Theory and Evidence," Journal of Political Economy, vol 129(5), pages 1553-1614.
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