This paper analyzes the impact of a preferential tax-price for monetary
donations on the joint decision to donate time (volunteer) and
money. The methodological approach takes into account that consumption
of each charitable good affects consumption of the other.
Using data from a national survey on household charitable giving,
the results show that donations of time and money are substitutes.
However, a decrease in the tax-price of monetary donations also has
a positive effect on donations of time that acts outside the change in
relative prices. This more than offsets the substitution effect leading
to an overall positive correlation between the two charitable goods.
(JEL D64, H24, H31)
Feldman, Naomi E.
"Time Is Money: Choosing between Charitable Activities."
American Economic Journal: Economic Policy,
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Fiscal Policies and Behavior of Economic Agents: Household