Charitable Giving as a Mixed Public/Private Good: Implications for Tax Policy

Richard Steinberg

Public Finance Review, 1986, vol. 14, issue 4, 415-431

Abstract: This is an analysis of the effect of tax changes on charitable giving in a model in which donors possess both private and public good motivations. In Nash equilibrium, donors respond both to changes in taxes and to induced responses by other donors. The aggregate change in donations is smaller than it would be in the pure private model by a factor involving the extent of crowdout of one's own donations by others’ giving. The direction and magnitude of crowdout depends on the relative importance of the public and private motivations, the Hicksian relation between the two (substitutes or complements), the extent of over- or undersupply of the public good, and the income elasticity of demand for the public good.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:14:y:1986:i:4:p:415-431

DOI: 10.1177/109114218601400403

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