SPI Working Paper Series
Is a Donor in Hand Better than Two in the Bush? Evidence from a Natural Field Experiment
This paper was published in American Economic Review in 2010
Craig E. Landry, Andreas Lange, John A. List, Michael K. Price, Nicholas G. Rupp
East Carolina University
University of Maryland
University of Chicago, NBER
University of Nevada, Reno
East Carolina University
Abstract:
This study develops theory and conducts an experiment to provide an understanding of why people initially give to charities, why they remain committed to the cause, and what factors attenuate these influences. Using an experimental design that links donations across distinct treatments separated in time, we present several insights. For example, we find that previous donors are more likely to give, and contribute more, than donors asked to contribute for the first time. Yet, how these previous donors were acquired is critical: agents who are initially attracted by signals of charitable quality transmitted via an economic mechanism are much more likely to continue giving than agents who were initially attracted by non-mechanism factors.
SPI Quick Look:
This study develops theory and conducts an experiment to provide an understanding of why people initially give to charities, why they remain committed to the cause, and what factors attenuate these influences. Using an experimental design that links donations across distinct treatments separated in time, results show that previous donors are more likely to give, and contribute more, than donors asked to contribute for the first time. Yet, how these previous donors are acquired is critical: agents who are initially attracted by signals of charitable quality transmitted via an economic mechanism, such as announcing seed money, using matching grants, or using lotteries or auctions, are much more likely to continue giving than agents who were initially attracted by non-mechanism factors.
