Modelling Charitable Donations: A Latent Class Panel Approach

Sarah Brown (), Mark Harris and Karl Taylor

No 2010017, Working Papers from The University of Sheffield, Department of Economics

Abstract: Abstract: We apply a latent class tobit framework to the analysis of charitable donations at the household level where the latent class aspect of the model splits households into two groups, which we subsequently interpret as "low" donators and "high" donators. Then the tobit part of the model explores the determinants of the amount donated by each household conditional on being in that class. We consider both total donations and also separately religious donations. Our findings, which are based on US panel data, suggest that price and labour income elasticities differ substantially across the two classes. The inverse price effect is most pronounced for the "low" donators group for both total and religious donations. The labour income elasticity switches direction of influence upon charitable donations across the two latent classes with a negative influence for the "high" donators group and a positive influence for the "low" donators group, for the case of total donations to charity, a pattern which is reversed in the case of solely religious donations.

Keywords: Charity; Donations; Latent Class; Panel Data; Tobit (search for similar items in EconPapers)
JEL-codes: D19 H24 H31 H41 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-09, Revised 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:shf:wpaper:2010017

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