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Agency Costs in Environmental Not-For-Profits

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  • Julie Hewitt
  • Daniel Brown

Abstract

We examine the behavior of not-for-profits using utility maximization. This leads to testable hypotheses regarding the costs of agency associated with the activities of not-for-profits. Our tests are similar to those previously employed regarding not-for-profit objectives, but our interpretation is different. Our empirical test uses data on environmental groups. Unlike previous studies biased toward a finding of service maximization, we account for endogenous explanatory variables. A weak statement of our results is that managers of environmental groups derive positive marginal utility from expenditures for purposes other than providing services. There may also be empirical support for a stronger conclusion. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Julie Hewitt & Daniel Brown, 2000. "Agency Costs in Environmental Not-For-Profits," Public Choice, Springer, vol. 103(1), pages 163-183, April.
    • Handle: RePEc:kap:pubcho:v:103:y:2000:i:1:p:163-183
    DOI: 10.1023/A:1005092819278
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    References listed on IDEAS

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    1. Elias Asproudis, 2011. "Revisiting environmental groups and members’ behaviour: budget, size and (im)pure altruism," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(2), pages 139-156, June.
    2. List, John A & Bulte, Erwin H & Shogren, Jason F, 2002. ""Beggar Thy Neighbor": Testing for Free Riding in State-Level Endangered Species Expenditures," Public Choice, Springer, vol. 111(3-4), pages 303-315, June.
    3. Hellerstein, Daniel & Nickerson, Cynthia J. & Cooper, Joseph C. & Feather, Peter & Gadsby, Dwight M. & Mullarkey, Daniel J. & Tegene, Abebayehu & Barnard, Charles H., 2002. "Farmland Protection: The Role Of Public Preferences For Rural Amenities," Agricultural Economic Reports 33963, United States Department of Agriculture, Economic Research Service.
    4. Patrizia Gazzola & Stefano Amelio & Daniele Grechi & Fragkoulis Papagiannis, 2021. "NPO Funding in Italy: The Role and the Contribution of Corporate Governance," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(12), pages 1-1, July.

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