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American Economic Review: Vol. 97 No. 5 (December 2007)

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

Article Citation

Karlan, Dean, and John A. List. 2007. "Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment." American Economic Review, 97(5): 1774-1793.

DOI: 10.1257/aer.97.5.1774

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. (JEL D64, L31)

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Authors

Karlan, Dean (Yale University and MIT)
List, John A. (University of Chicago)

JEL Classifications

D64: Altruism
L31: Nonprofit Institutions; NGOs


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