Crowding In with Impure Altruism: Theory and Evidence from Volunteerism in National Parks

Matthew Kotchen and Katherine R.H. Wagner

No 26445, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper makes three contributions to the literature on private provision of public goods. First, we identify limitations of the frequently used specification test that distinguishes between the standard models of pure and impure altruism based on the extent of crowding out. While the literature takes as given the result that crowding out should be less with impure altruism compared with pure altruism, we show that, in general, it can be either more or less. Second, we propose a more general test based on the presence of crowding in, rather than the extent of crowding out. Third, we provide empirical evidence. Using a unique panel data set on volunteerism in U.S. National Parks, we estimate the causal effect of changes in public funding within parks on the amount of within-park volunteerism. The overall finding is that each additional dollar of public expenditure crowds in 27 cents worth of volunteerism on average. We show how the estimates of crowding in, along with heterogeneity based on park and volunteer hour types, are theoretically consistent with the mainstay model of impure altruism.

JEL-codes: H40 H50 Q26 (search for similar items in EconPapers)
Date: 2019-11
Note: EEE PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Matthew J. Kotchen & Katherine R.H. Wagner, 2023. "Crowding in with impure altruism: Theory and evidence from volunteerism in national parks," Journal of Public Economics, vol 222.

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