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Crowding-out (-in) Effects of Subsidy Schemes on Individual Donations: An Experimental Study

Hui-Chun Peng and Wen-Jing Liu

Judgment and Decision Making, 2020, vol. 15, issue 3, 346-352

Abstract: We conduct a laboratory experiment to investigate whether the rebate and matching subsidy schemes cause crowding-out or crowding-in effects (reductions or increases in amount donated) on individual net donations. We find that when the rebate subsidy scheme is implemented, it does not result in crowding-out or crowding-in effects on individual net donations. However, when the matching subsidy scheme is implemented, it encourages individuals to donate more and generates crowding-in effects on individual net donations.

Date: 2020
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