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The price elasticity of warm-glow giving

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  • Gandullia, Luca

Abstract

We examine the charitable giving behavior of warm-glow givers in response to the same donation incentive structure, but with formally different schemes. At this aim we implement a large online survey (N=1655) using the Amazon Mechanical Turk platform. First, we elicit and measure warm-glow giving. Then, we employ a between-subjects design in which each warm-glow donor (N=881) is randomly assigned to one of two treatment groups that differ for the subsidy (rebate or matching) and is asked to make a series of allocation decisions between himself and a charity of his choice. The results show that contributions are significantly more responsive to matching (-1.15) than to rebate subsidies (-0.17). Moreover, we provide evidence that, under rebate, price elasticity decreases as the warm-glow magnitude increases. For weak warm-glow givers, price elasticity is double that for strong warm-glow donors.

Suggested Citation

  • Gandullia, Luca, 2019. "The price elasticity of warm-glow giving," Economics Letters, Elsevier, vol. 182(C), pages 30-32.
    • Handle: RePEc:eee:ecolet:v:182:y:2019:i:c:p:30-32
    DOI: 10.1016/j.econlet.2019.05.046
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    Citations

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    Cited by:

    1. repec:cup:judgdm:v:17:y:2022:i:5:p:1058-1071 is not listed on IDEAS
    2. Ben Grodeck & Philipp Schoenegger, 2022. "Demanding the Morally Demanding: Experimental Evidence on the Effects of Moral Arguments and Moral Demandingness on Charitable Giving," Monash Economics Working Papers 2022-03, Monash University, Department of Economics.
    3. Gandullia, Luca & Lezzi, Emanuela & Parciasepe, Paolo, 2020. "Replication with MTurk of the experimental design by Gangadharan, Grossman, Jones & Leister (2018): Charitable giving across donor types," Journal of Economic Psychology, Elsevier, vol. 78(C).
    4. repec:jdm:journl:v:17:y:2022:i:5:p:1058-1071 is not listed on IDEAS
    5. Johannes Diederich & Catherine C. Eckel & Raphael Epperson & Timo Goeschl & Philip J. Grossman, 2022. "Subsidizing unit donations: matches, rebates, and discounts compared," Experimental Economics, Springer;Economic Science Association, vol. 25(2), pages 734-758, April.
    6. Andersson, Henrik & Ouvrard, Benjamin, 2023. "Priming and the Value of a Statistical Life: A Cross Country Comparison," TSE Working Papers 23-1439, Toulouse School of Economics (TSE).
    7. Ben Grodeck & Philip J. Grossman, 2022. "Thumbs Down for the Thumbs Up Emoji: Experimental Evidence on the Impact of Instantaneous Positive Reinforcement on Charitable Giving," Monash Economics Working Papers 2022-01, Monash University, Department of Economics.
    8. Zou, Fei & Yang, Mei & Zhou, Yanju & Deng, Yaling & Xie, Baiwei, 2024. "Goal-gradient point rewards can increase consumers' willingness to purchase poverty-alleviating products," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    9. Fielding, David & Knowles, Stephen & Peeters, Ronald, 2023. "Timing of rebates and generosity," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    10. Andersson, Henrik & Scholtz, Henrik & Zheng, Jiakun, 2023. "Measuring regret theory in the health and financial domain," TSE Working Papers 23-1449, Toulouse School of Economics (TSE).
    11. Grodeck, Ben & Schoenegger, Philipp, 2023. "Demanding the morally demanding: Experimental evidence on the effects of moral arguments and moral demandingness on charitable giving," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 103(C).
    12. Grodeck, Ben & Grossman, Philip J., 2024. "Instantaneous positive reinforcement does not increase donations: Evidence from online experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 446-460.
    13. Andersson, Henrik & Ouvrard, Benjamin, 2023. "Priming and the value of a statistical life: A cross country comparison," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 104(C).

    More about this item

    Keywords

    Charitable giving; Warm-glow; Price elasticity; Online experiments;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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