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Dimensions of donation preferences: the structure of peer and income effects

Published online by Cambridge University Press:  14 March 2025

Michalis Drouvelis Open the ORCID record for Michalis Drouvelis [Opens in a new window]  and
Benjamin M. Marx
Michalis Drouvelis*
Affiliation:
Department of Economics, University of Birmingham, Edgbaston, Birmingham B15 2TT, UK CESifo, Munich, Germany
Benjamin M. Marx*
Affiliation:
Department of Economics, University of Illinois, 214 David Kinley Hall, MC-707 1407 W. Gregory, Urbana, IL 61801, USA
*
m.drouvelis@bham.ac.uk
benmarx@illinois.edu
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Abstract

Charitable donations provide positive externalities and can potentially be increased with an understanding of donor preferences. We obtain a uniquely comprehensive characterization of donation motives using an experiment that varies treatments between and within subjects. Donations are increasing in peers’ donations and past subjects’ donations. These and other results suggest a model of heterogeneous beliefs about the social norm for giving. Estimation of such a model reveals substantial heterogeneity in subjects’ beliefs about and adherence to the norm. A simple fundraising strategy increases donations by an estimated 30% by exploiting previously unstudied correlations between dimensions of donor preferences.

Keywords

CharitableDonationAltruismWarm glowSocial preferencesPeer effectsExperiment

JEL classification

D64: Altruism • Philanthropy • Intergenerational Transfers A13: Relation of Economics to Social Values D01: Microeconomic Behavior: Underlying Principles
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 1 , March 2021 , pp. 274 - 302
Copyright
Copyright © 2020 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09661-z) contains supplementary material, which is available to authorized users.

We are grateful to the Birmingham–Illinois Partnership for Discovery, Engagement, and Education for research support. We thank Masaki Aoyagi, Antonio Cabrales, Gary Charness, Tongzhe Li, Mark Ottoni-Wilhelm, Michael Price, Aldo Rustichini, Kimberley Scharf, and seminar participants at the University of Illinois, the University of Southern California, the University of Windsor, the 2017 Annual Conference of the International Institute for Public Finance, the 2017 Association for Research on Nonprofit Organizations and Voluntary Action, Behavioral Exchange 2017, the 2017 Nordic Conference on Behavioural and Experimental Economics, the 2018 Annual Meeting of the Southern Economic Association, and the 2019 Annual Meeting of the American Economic Association for helpful comments. Yuci Chen provided excellent research assistance.

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