This paper defines, discusses, and measures “expenditure substitution” in charitable giving. Motivated by a model of conditional demand, I consider the extent to which a “temporary shock” that increases an individual's donation to one cause by a particular amount displaces her gifts to other charitable causes. I use the 2001-2007 waves of the PSID/COPPS, the first data set of its kind, to identify this. Households that give more to one type of charity tend to give more to others. However, many of the correlations between the residuals after fixed-effects regressions are negative and significant, particularly for larger donors and for certain categories of charitable giving. Given plausible econometric assumptions, the negative correlations are strong evidence of expenditure substitution. Overall, these results suggest heterogeneous motivations for giving: small givers may be mainly driven by temporary shocks and personal appeals while larger givers may have concave multi-charity warm-glow preferences.
Contents
- Advances Article
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Requires Authentication UnlicensedDoes One Charitable Contribution Come at the Expense of Another?LicensedJune 30, 2011
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Requires Authentication UnlicensedRacial Disparities in Credit Constraints in the Great Recession: Evidence from the UKLicensedSeptember 29, 2011
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Requires Authentication UnlicensedThe Progressivity of Social SecurityLicensedNovember 23, 2011
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Requires Authentication UnlicensedBertrand Competition in Markets with Network Effects and Switching CostsLicensedSeptember 18, 2011
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Requires Authentication UnlicensedDemanding Customers: Consumerist Patients and Quality of CareLicensedSeptember 18, 2011
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Requires Authentication UnlicensedThe Impact of Class Size on Outcomes in Higher EducationLicensedSeptember 29, 2011
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Requires Authentication UnlicensedEstimating Dynamic Income Responses to Tax ReformLicensedNovember 28, 2011
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Requires Authentication UnlicensedEconomic Decision-Making in Poverty Depletes Behavioral ControlLicensedDecember 11, 2011
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Requires Authentication UnlicensedAre Entry Threats Always Credible?LicensedDecember 13, 2011
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Requires Authentication UnlicensedWhy Don't Taxpayers Maximize their Tax-Based Student Aid? Salience and Inertia in Program SelectionLicensedDecember 22, 2011
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Requires Authentication UnlicensedMedicaid and Ethnic NetworksLicensedDecember 30, 2011
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Requires Authentication UnlicensedThe Influence of Firms on GovernmentLicensedJanuary 6, 2011
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Requires Authentication UnlicensedFree Trade, Autarky and the Sustainability of an International Environmental AgreementLicensedJanuary 26, 2011
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