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Contributions in heterogeneous communities: Evidence from Indonesia

Cagla Okten () and Una Osili

Journal of Population Economics, 2004, vol. 17, issue 4, 603-626

Abstract: Using household-level data from Indonesia, we investigate the importance of community characteristics: ethnic diversity and central government transfers, inter alia, in determining monetary and time contributions to community organizations. We present a framework in which ethnic diversity affects contributions through three channels: (1) diversity of preferences (2) transaction costs, and (3) inter-household considerations in the form of altruism towards one’s ethnic group. Our empirical findings provide evidence that ethnic diversity has a negative and significant effect on contributions, and the prevalence of community organizations. We find evidence that government spending crowds out private monetary contributions, with a less robust effect on time contributions. Copyright Springer-Verlag 2004

Keywords: O12; H41; J16; Z13; Ethnic diversity; contributions; transfers; community organizations (search for similar items in EconPapers)
Date: 2004
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DOI: 10.1007/s00148-004-0189-y

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