Testing for Altruism and Social Pressure in Charitable Giving

Stefano DellaVigna, John List and Ulrike Malmendier

The Quarterly Journal of Economics, 2012, vol. 127, issue 1, 1-56

Abstract: Every year, 90% of Americans give money to charities. Is such generosity necessarily welfare enhancing for the giver? We present a theoretical framework that distinguishes two types of motivation: individuals like to give, for example, due to altruism or warm glow, and individuals would rather not give but dislike saying no, for example, due to social pressure. We design a door-to-door fund-raiser in which some households are informed about the exact time of solicitation with a flyer on their doorknobs. Thus, they can seek or avoid the fund-raiser. We find that the flyer reduces the share of households opening the door by 9% to 25% and, if the flyer allows checking a Do Not Disturb box, reduces giving by 28% to 42%. The latter decrease is concentrated among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving. Combining data from this and a complementary field experiment, we structurally estimate the model. The estimated social pressure cost of saying no to a solicitor is $3.80 for an in-state charity and $1.40 for an out-of-state charity. Our welfare calculations suggest that our door-to-door fund-raising campaigns on average lower the utility of the potential donors. Copyright 2012, Oxford University Press.

Date: 2012
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Working Paper: Testing for altruism and social pressure in charitable giving (2012)
Working Paper: Testing for Altruism and Social Pressure in Charitable Giving (2009)
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