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The price elasticity of charitable giving: New experimental evidence

Luca Gandullia () and Emanuela Lezzi

Economics Letters, 2018, vol. 173, issue C, 88-91

Abstract: We examine the charitable giving decisions of donors under two subsidy mechanisms, rebate and matching, and we calculate the price elasticity of giving. We implement an online survey using the Amazon Mechanical Turk platform. Participants are asked to make a series of allocation decisions between themselves and a charity of their choice. We vary endowment and subsidy rates in line with the literature. The results show that contributions under matching subsidies are significantly higher than contributions under rebate subsidies. Participants who usually make a donation are more likely to give and are less responsive to price changes. Moreover, the probability of giving increases monotonically along with subsidy rates.

Keywords: Charitable giving; Subsidies; Intensive elasticity; Extensive elasticity; Online experiments (search for similar items in EconPapers)
JEL-codes: H41 C90 C91 D64 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:ecolet:v:173:y:2018:i:c:p:88-91