Department of Economics
55 Park Place
Atlanta, GA 30302
Institutional Affiliation: Georgia State University
NBER Working Papers and Publications
|May 2020||Robbing Peter to Pay Paul: Understanding How State Tax Credits Impact Charitable Giving|
with , , : w27163
Donations to charity are widely encouraged by policymakers through targeted tax incentives such as tax credits for contributions only to qualifying causes. We use a framed field experiment to test how the largest such program, Arizona’s state income tax credit for donations to qualifying charities, affects donation decisions in a modified dictator game. In the experiment, we randomize whether subjects receive detailed information about the tax credit program prior to selecting potential recipients and completing the allocation task. We also vary the number of charities that subjects can select as recipients along with the (tax-credit) qualifying vs. non-qualifying composition of the choice set. We find that average giving is unaffected by the information provision and composition of the ch...