Modeling and Measuring Scale Attraction Effects: An Application to Charitable Donations

46 Pages Posted: 17 Mar 2018 Last revised: 30 Mar 2018

See all articles by Kee Yuen Lee

Kee Yuen Lee

Hong Kong Polytechnic University

Fred M. Feinberg

University of Michigan at Ann Arbor - Marketing; University of Michigan, Stephen M. Ross School of Business

Date Written: July 17, 2017

Abstract

Charities seeking donations typically employ an “appeals scale,” a roster of suggested amounts presented to potential donors, along with an “Other” category. Yet little is known about how the amounts comprising appeals scales affect whether a donation is made and, if so, jointly exert “pull” on its magnitude. Availing of multi-year panel data and a field experiment, we develop a model accounting for individual level donation incidence, amount, and appeals scale attraction effects. The model incorporates heterogeneity across donors in both upward and downward scale point attraction, as well as in donation patterns (e.g., seasonality), and accommodates multiple operationalizations of internal and external referents to summarize the effects of prior donation history and scale points, respectively.

Overall results suggest that scale points do exert substantial attraction effects; that these vary markedly across donors; that they are in fact referent-based effects; that donors are more easily persuaded to give less than more; and that, while all scale points exert pull, influence wanes with distance. The modeling framework applies not only in donation contexts, but whenever an ordered categorical scale is used to collect data regarding an underlying latent response.

Keywords: Charities, Donor Behavior, Bayesian Econometrics, Panel Data, Marketing Models

Suggested Citation

Lee, Kee Yuen and Feinberg, Fred M. and Feinberg, Fred M., Modeling and Measuring Scale Attraction Effects: An Application to Charitable Donations (July 17, 2017). Ross School of Business Paper No. 1380, Available at SSRN: https://ssrn.com/abstract=3142650 or http://dx.doi.org/10.2139/ssrn.3142650

Kee Yuen Lee

Hong Kong Polytechnic University ( email )

Hong Kong

Fred M. Feinberg (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

University of Michigan at Ann Arbor - Marketing ( email )

Ann Arbor, MI 48109
United States

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