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A Greater Price for a Greater Good? Evidence That Consumers Pay More for Charity-Linked Products

Daniel W. Elfenbein and Brian McManus

American Economic Journal: Economic Policy, 2010, vol. 2, issue 2, 28-60

Abstract: To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and noncharity auctions of otherwise identical products. Charity prices are 6 percent higher, on average, than noncharity prices. Bids below the closing price are also higher, as are bids by individuals bidding on identical charity and noncharity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities. (JEL D12, D44, D64, L81, M14, M31)

JEL-codes: D12 D44 D64 L81 M14 M31 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/pol.2.2.28
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Handle: RePEc:aea:aejpol:v:2:y:2010:i:2:p:28-60