Effects of the Price of Charitable Giving: Evidence from an Online Crowdfunding Platform

29 Pages Posted: 31 May 2013 Last revised: 20 Feb 2023

See all articles by Jonathan Meer

Jonathan Meer

Texas A&M University - Department of Economics

Date Written: May 2013

Abstract

A long literature has examined the effects of the price of giving - that is, the amount an in-dividual must give for one dollar to accrue to the charitable activity itself - on donative behavior. We use data from DonorsChoose.org, an online platform linking teachers with prospective donors, that are uniquely suited to addressing this question due to exogenous variation in overhead costs. An increased price of giving results in a lower likelihood of a project being funded. We also calculate the price elasticity of giving, finding estimates between -0.8 and -2; these are likely to be upper bounds on the tax price elasticity of charitable donations. Finally, we examine the effect of competition on giving and find that increased competition reduces the likelihood of a project being funded. These results provide insight into the workings of the market for charitable gifts.

Suggested Citation

Meer, Jonathan, Effects of the Price of Charitable Giving: Evidence from an Online Crowdfunding Platform (May 2013). NBER Working Paper No. w19082, Available at SSRN: https://ssrn.com/abstract=2272518

Jonathan Meer (Contact Author)

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

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