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Economics of Altruism: Evidence from the Field
Saturday, Jan. 5, 2019
2:30 PM - 4:30 PM
Association for the Study of Generosity in Economics
University of Notre Dame
The Deadweight Loss of Social Recognition
A growing body of empirical work shows that social recognition can meaningfully influence individuals’ choices. This paper studies whether social recognition is a socially efficient lever for influencing individuals’ choices. Because social recognition generates utility from esteem to some but disutility from shame to others, it can be either positive-sum, negative-sum, or zero-sum. This depends on whether the social recognition utility function is convex, concave, or linear, respectively. To investigate this question, we develop a new experimental methodology, which we deploy in a field experiment on promoting attendance to the YMCA, one of the largest non-profit organizations in the world. We find that social recognition increases YMCA attendance by 17-23% over a one-month period. However, we find that the social recognition utility function is significantly concave and thus generates deadweight loss. If our social recognition intervention were applied to the whole YMCA population, it would generate a significant deadweight loss per dollar of behaviorally-equivalent financial incentives.
The Joy of Giving: Evidence from a Matching Experiment
How large is the joy of giving? Does the size of the gift matter? How does the joy derived from giving vary between persons? We answer these questions in a unique experiment conducted among large samples of the general population (n = 1,232) and of millionaires (n = 807) in the Netherlands. Two thirds of participants entered a lottery with five prizes worth €100 that could be donated to a charity of their choice. For one third of participants in the match treatment, contributions were doubled by the experimenters. After the donation decision, participants reported their mood. A control group of one third of all participants did not enter the lottery and only reported their mood. Our study is the first large-scale experiment that includes measures of the joy of giving to test the model of impure altruism against pure warm glow and pure altruism. In addition, our experiment is the first large sample study to demonstrate individual heterogeneity in the joy of giving.
Personalized Threshold Matching for Charitable Gifts: A Field Experiment
While increasing the number of donors, standard matching has been shown to cause considerable crowding out (Eckel and Grossman, 2003, Karlan and List, 2007, or Huck and Rasul, 2011). Can we design an alternative matching scheme that would lead to an increase in the values of gifts given? We propose a form of a threshold matching that matches any donation above a certain threshold with a fixed amount. First, we study how such thresholds should be chosen depending on past donations. We find that asking for less than the amount given in the past results in lower donations and lower revenue. Asking for the amount given in the past or a higher amount increases donations with a threshold of 60-75% higher than the past donation being optimal. However, while asking for less result in high compliance, asking for more also triggers some contrarian behavior. Second, we study how to use such personalized matching for prospective donors based on observable characteristics. Finally, we compare personalized threshold matching to a non-personalized version with the same threshold for all participants. In the sample of previous non-donors, higher threshold results in lower response rate, higher average donation, and lower return per mail-out.
University of Notre Dame
Texas A&M University
H4 - Publicly Provided Goods