More Giving of More Givers? The Effects of Tax Incentives on Charitable Donations in the UK

Miguel Almunia, Ben Lockwood and Kimberley Scharf

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: This paper estimates the tax-price elasticity of giving using UK administrative tax return data, exploiting variation from a large tax reform. We estimate both the intensive and extensive-margin elasticity, using a novel instrumental variables strategy. Then, we derive new conditions to evaluate the welfare consequences of changes in the generosity of the subsidy to donations. We find a small intensive-margin elasticity of -0.2 and a substantial extensive-margin elasticity of -0.8, yielding a total elasticity of about -1. These estimates mask considerable heterogeneity: high-income individuals respond more on the intensive margin, while the extensive-margin response is stronger among low-income taxpayers.

Keywords: JEL Classification: H24; H31; D64 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (10)

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https://warwick.ac.uk/fac/soc/economics/research/c ... _lockwood_scharf.pdf

Related works:
Journal Article: More giving or more givers? The effects of tax incentives on charitable donations in the UK (2020)
Working Paper: More Giving or More Givers? The Effects of Tax Incentives on Charitable Donations in the UK (2019)
Working Paper: More Giving or More Givers? The Effects of Tax Incentives on Charitable Donations in the UK (2017)
Working Paper: More Giving or More Givers? The Effects of Tax Incentives on Charitable Donations in the UK (2017)
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