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American Economic Review Vol. 97 No. 5 2007

Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment

Dean Karlan1; John A. List2

1 Department of Economics, Yale Univeristy, P.O. Box 208209, New Haven, CT 06520, Innovations for Poverty Action, and MIT Jameel Poverty Action Lab. · 2 Department of Economics, University of Chicago, Chicago, IL 60637, Innovations for Poverty Action, and NBER.

Abstract

We conducted a natural field experiment to further our understanding of the economics of charity. Using direct mail solicitations to over 50,000 prior donors of a nonprofit organization, we tested the effectiveness of a matching grant on charitable giving. We find that the match offer increases both the revenue per solicitation and the response rate. Larger match ratios (i.e., 3:1 and 2:1) relative to a smaller match ratio (1:1) had no additional impact, however. The results provide avenues for future empirical and theoretical work on charitable giving, cost-benefit analysis, and the private provision of public goods.

DOI
10.1257/aer.97.5.1774
Volume
97
Issue
5
Pages
1774-1793
Language
en
Sources
openalex bibtex:phds-export.bib crossref

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