The price elasticity of charitable giving: does the form of tax relief matter?

Kimberley Scharf and Sarah Smith

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: This paper uses a survey-based approach to test alternative methods of channeling tax relief to donors – as a tax rebate for the donor or as a matched payment to the receiving charity. On accounting grounds these two are equivalent but, in line with earlier experimental studies, we find that gross donations are significantly more responsive to a match change than to a rebate change. We show that the difference can largely be explained by the fact that a majority of donors do not adjust their nominal donations in response to a change in subsidy. This evidence adds to the growing empirical literature suggesting that consumers may not react to tax changes. In the case of tax subsidies for donations, this has implications for policy design – we show for the UK that a match-based system is likely to be more effective at increasing the total amount of money going to charities.

Keywords: charitable giving; tax subsidies; price elasticity (search for similar items in EconPapers)
JEL-codes: C99 D12 D64 H24 H31 H41 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-10
New Economics Papers: this item is included in nep-pbe and nep-pub
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.bristol.ac.uk/cmpo/publications/papers/2010/wp247.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.bristol.ac.uk/cmpo/publications/papers/2010/wp247.pdf [302 Moved Temporarily]--> https://www.bristol.ac.uk/cmpo/publications/papers/2010/wp247.pdf)

Related works:
Journal Article: The price elasticity of charitable giving: does the form of tax relief matter? (2015)
Working Paper: The Price Elasticity of Charitable Giving:Does the Form of Tax Relief Matter? (2010)
Working Paper: The price elasticity of charitable giving: does the form of tax relief matter? (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:10/247

Access Statistics for this paper

More papers in The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK Contact information at EDIRC.
Bibliographic data for series maintained by ().