Tax-price elasticity of charitable donations: Evidence from the German taxpayer panel

Maja Adena

Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

Abstract: I estimate permanent and transitory tax-price and income elasticity of charitable giving in Germany using a rich panel data of tax return for the years 2001-2006. Income tax reforms were implemented in 2004 and 2005. The results suggest that the permanent tax-price elasticity varies significantly by income class, ranging from -0.2 for low incomes to -1.6 for higher incomes. Permanent income elasticity does not vary much among income classes, is rather low, and ranges between 0.2-0.3. The donors adjust their donations gradually after changes in the tax schedule and respond to future predictable changes in price. They respond to changes in current and, to a smaller extent, in future income.

Keywords: charitable giving; price elasticity; tax incentives (search for similar items in EconPapers)
JEL-codes: D12 H24 H31 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-eur, nep-pbe, nep-pub and nep-sog
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Tax-price elasticity of charitable donations – evidence from the German taxpayer panel (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbeoc:spii2014302

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