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American Economic Journal: Economic Policy: Vol. 2 No. 2 (May 2010)

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A Greater Price for a Greater Good? Evidence That Consumers Pay More for Charity-Linked Products

Article Citation

Elfenbein, Daniel W., and Brian McManus. 2010. "A Greater Price for a Greater Good? Evidence That Consumers Pay More for Charity-Linked Products." American Economic Journal: Economic Policy, 2(2): 28-60.

DOI: 10.1257/pol.2.2.28

Abstract

To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and noncharity auctions of otherwise identical products. Charity prices are 6 percent higher, on average, than noncharity prices. Bids below the closing price are also higher, as are bids by individuals bidding on identical charity and noncharity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities. (JEL D12, D44, D64, L81, M14, M31)

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Authors

Elfenbein, Daniel W. (Washington U in St Louis)
McManus, Brian (U NC)

JEL Classifications

D12: Consumer Economics: Empirical Analysis
D44: Auctions
D64: Altruism
L81: Retail and Wholesale Trade; e-Commerce
M14: Corporate Culture; Social Responsibility
M31: Marketing

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