Transaction Costs, the Opportunity Cost of Time and Procrastination in Charitable Giving
47 Pages Posted: 24 Dec 2013 Last revised: 22 Feb 2016
Date Written: April 15, 2015
Abstract
We conduct a laboratory experiment to study whether giving people more time to donate to charity reduces donations. People may intend to donate, but because of the transaction costs of doing so, postpone making the payment until they are less busy, and having postponed making the donation once, keep postponing. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. We find evidence of a transaction cost reducing donations, with the size of this effect depending on the opportunity cost of time, but no statistically significant evidence that giving people more time to donate increases procrastination and thus reduces donations.
Keywords: charitable giving, dictator game, transaction costs, opportunity cost of time, procrastination
JEL Classification: C91, D64
Suggested Citation: Suggested Citation