Tax-price elasticities of charitable giving and selection of reporting: panel study of South Korea

Hiroki Kato, Tsuyoshi Goto () and Youngrok Kim

Oxford Economic Papers, 2025, vol. 77, issue 3, 829-848

Abstract: In this study, we estimate the tax-price elasticity of charitable giving and address the bias caused by the existence of unreported donations and self-selection regarding reporting on giving. To eliminate this bias, we propose a simple estimation method based on intention-to-treat analysis. Using our proposed method and the exogenous variation in tax incentives in the 2014 South Korean tax reform, we estimate the price elasticity to be −3.5 for the amount of total giving, which is more elastic than that in the standard results that do not account for unreported donations and self-selection. This result implies that the 2014 tax reform reduced the total amount of giving and that tax incentives should be expanded.

Keywords: charitable giving; tax incentives; price elasticity; selection; reporting (search for similar items in EconPapers)
JEL-codes: D64 H24 H31 (search for similar items in EconPapers)
Date: 2025
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