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WP #: 007

Date: Dec 2014


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Testing for Altruism and Social Pressure in Charitable Giving

     This paper was published in The Quarterly Journal of Economics in 2012

    Stefano DellaVigna, John A. List, Ulrike Malmendier

    University of California-Berkeley, NBER
    University of Chicago, NBER
    University of California-Berkeley, NBER


Abstract:
Every year, 90 percent of Americans give money to charities. Is such generosity necessarily welfare enhancing for the giver? We present a theoretical framework that distinguishes two types of motivation: individuals like to give, e.g., due to altruism or warm glow, and individuals would rather not give but dislike saying no, e.g., due to social pressure. We design a door-to-door fund-raising drive in which some households are informed about the exact time of solicitation with a flyer on their door-knobs; thus, they can seek or avoid the fund-raiser. We find that the flyer reduces the share of households opening the door by 10 to 25 percent and, if the flyer allows checking a `Do Not Disturb' box, reduces giving by 30 percent. The latter decrease is concentrated among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving. Combining data from this and a complementary field experiment, we structurally estimate the model. The estimated social pressure cost of saying no to a solicitor is $3.5 for an in-state charity and $1.4 for an out- of-state charity. Our welfare calculations suggest that our door-to-door fund- raising campaigns on average lower utility of the potential donors.


SPI Quick Look:
This paper distinguishes and tests two types of motivation for charitable giving: individuals like to give, e.g., due to altruism or warm glow, and individuals would rather not give but dislike saying no, e.g., due to social pressure. The paper presents results from a door-to-door fund-raising drive in which some households are informed about the exact time of solicitation with a flyer on their door-knobs; thus, they can seek or avoid the fund-raiser. Results show that the flyer reduces the share of households opening the door by 10 to 25 percent and, if the flyer allows checking a `Do Not Disturb' box, reduces giving by 30 percent. The latter decrease is concentrated among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving. Combining data from this and a complementary field experiment, we structurally estimate the model. The estimated social pressure cost of saying no to a solicitor is $3.5 for an in-state charity and $1.4 for an out- of-state charity.