Estimation of the House Money Effect Using Hurdle Models

Christoph Engel and Peter G. Moffat
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Peter G. Moffat: School of Economics, University of East Anglia, Norwich, UK

No 2012_13, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: Evidence from an experiment investigating the “house money effect” in the context of a public goods game is reconsidered. Analysis is performed within the framework of the panel hurdle model, in which subjects are assumed to be one of two types: free-riders, and potential contributors. The effect of house money is seen to be significant in the first hurdle: specifically, house money makes a subject more likely to be a potential contributor. Hence we find that the effect of house money is more than just an effect on behaviour; it has the effect of changing a subject from one type to another. This result is potentially important in the external validity debate.

Keywords: Public Good Experiment; Hurdle Model; double hurdle model; Tobit; panel data (search for similar items in EconPapers)
JEL-codes: C23 C24 C91 D03 D62 D63 D64 H41 (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:mpg:wpaper:2012_13

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