IDEAS home Printed from https://ideas.repec.org/a/spr/jecrev/v74y2023i1d10.1007_s42973-021-00083-x.html
   My bibliography  Save this article

An analysis of altruistic and selfish motivations underlying hometown tax donations in Japan

Author

Listed:
  • Eiji Yamamura

    (Seinan Gakuin University)

  • Yoshiro Tsutsui

    (Kyoto Bunkyo University)

  • Fumio Ohtake

    (Osaka University)

Abstract

This study analyzes the altruistic and selfish motivations that underlie the payment made toward Japan’s Hometown Tax Donation system by the citizens, whereby they can pay the tax to municipalities other than the ones in which they reside and receive reciprocal gifts. Using the local government level panel data for 2008–2015, we find that the Great East Japan Earthquake led to an increase in payments through the system to municipalities in which disaster victims lived, thus reflecting an altruistic motive among the citizens. However, a 1% increase in expenditure toward gifts for donors led to only a 0.61% increase in payments, thus suggesting a selfish motive. Gifting thus dramatically reduces altruistic payments.

Suggested Citation

  • Eiji Yamamura & Yoshiro Tsutsui & Fumio Ohtake, 2023. "An analysis of altruistic and selfish motivations underlying hometown tax donations in Japan," The Japanese Economic Review, Springer, vol. 74(1), pages 29-55, January.
    • Handle: RePEc:spr:jecrev:v:74:y:2023:i:1:d:10.1007_s42973-021-00083-x
    DOI: 10.1007/s42973-021-00083-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s42973-021-00083-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s42973-021-00083-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    2. Eiji Yamamura & Yoshiro Tsutsui & Chisako Yamane & Shoko Yamane & Nattavudh Powdthavee, 2015. "Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(3), pages 919-935, September.
    3. Chie Hanaoka & Hitoshi Shigeoka & Yasutora Watanabe, 2018. "Do Risk Preferences Change? Evidence from the Great East Japan Earthquake," American Economic Journal: Applied Economics, American Economic Association, vol. 10(2), pages 298-330, April.
    4. Eiji Yamamura, 2010. "Effects of Interactions among Social Capital, Income and Learning from Experiences of Natural Disasters: A Case Study from Japan," Regional Studies, Taylor & Francis Journals, vol. 44(8), pages 1019-1032.
    5. Ackerman, Deena & Auten, Gerald, 2011. "Tax Expenditures for Noncash Charitable Contributions," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 651-687, June.
    6. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    7. Slemrod, Joel, 1989. "Are Estimated Tax Elasticities Really Just Tax Evasion Elasticities? The Case of Charitable Contributions," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 517-522, August.
    8. Kimberley Scharf & Sarah Smith, 2015. "The price elasticity of charitable giving: does the form of tax relief matter?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 330-352, April.
    9. Blumenthal, Marsha & Kalambokidis, Laura & Turk, Alex, 2012. "Subsidizing Charitable Contributions With a Match Instead of a Deduction: What Happens to Donations and Compliance?," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 91-116, March.
    10. Allgood, Sam, 2009. "Charity, Impure Altruism, and Marginal Redistributions of Income," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(2), pages 219-235, June.
    11. Greene, Pamela & McClelland, Robert, 2001. "Taxes and Charitable Giving," National Tax Journal, National Tax Association, vol. 54(n. 3), pages 433-53, September.
    12. Eiji Yamamura, 2016. "Natural disasters and social capital formation: The impact of the Great Hanshin-Awaji earthquake," Papers in Regional Science, Wiley Blackwell, vol. 95, pages 143-164, March.
    13. Tiehen, Laura, 2001. "Tax Policy and Charitable Contributions of Money," National Tax Journal, National Tax Association, vol. 54(n. 4), pages 707-23, December.
    14. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    15. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    16. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
    17. Eiji Yamamura, 2017. "Identity, nostalgia and happiness among migrants: The case of the KÅ shien High School Baseball Tournament in Japan," Pacific Economic Review, Wiley Blackwell, vol. 22(5), pages 792-813, December.
    18. Crumpler, Heidi & Grossman, Philip J., 2008. "An experimental test of warm glow giving," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1011-1021, June.
    19. Joel Slemrod, 2010. "Old George Orwell Got It Backward: Some Thoughts on Behavioral Tax Economics," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 15-33, March.
    20. Tiehen, Laura, 2001. "Tax Policy and Charitable Contributions of Money," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(4), pages 707-723, December.
    21. Oscar Becerra & Eduardo Cavallo & Ilan Noy, 2014. "Foreign Aid in the Aftermath of Large Natural Disasters," Review of Development Economics, Wiley Blackwell, vol. 18(3), pages 445-460, August.
    22. Akesaka, Mika, 2019. "Change in time preferences: Evidence from the Great East Japan Earthquake," Journal of Economic Behavior & Organization, Elsevier, vol. 166(C), pages 239-245.
    23. Derin-Güre, Pinar & Uler, Neslihan, 2010. "Charitable giving under inequality aversion," Economics Letters, Elsevier, vol. 107(2), pages 208-210, May.
    24. Daniel J. Benjamin & James J. Choi & A. Joshua Strickland, 2010. "Social Identity and Preferences," American Economic Review, American Economic Association, vol. 100(4), pages 1913-1928, September.
    25. Duquette, Christopher M., 1999. "Is Charitable Giving by Nonitemizers Responsive to Tax Incentives? New Evidence," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 195-206, June.
    26. Brooks, Arthur C., 2002. "Charitable Giving in Transition Economies: Evidence From Russia," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(4), pages 743-753, December.
    27. Greene, Pamela & McClelland, Robert, 2001. "Taxes and Charitable Giving," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(3), pages 433-453, September.
    28. Erzo F. P. Luttmer & Monica Singhal, 2011. "Culture, Context, and the Taste for Redistribution," American Economic Journal: Economic Policy, American Economic Association, vol. 3(1), pages 157-179, February.
    29. Eckel, Catherine C. & Grossman, Philip J., 2003. "Rebate versus matching: does how we subsidize charitable contributions matter?," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 681-701, March.
    30. Duquette, Christopher M., 1999. "Is Charitable Giving by Nonitemizers Responsive to Tax Incentives? New Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 195-206, June.
    31. Bakija, Jon & Heim, Bradley T., 2011. "How Does Charitable Giving Respond to Incentives and Income? New Estimates From Panel Data," National Tax Journal, National Tax Association;National Tax Journal, vol. 64(2), pages 615-650, June.
    32. Gerald E. Auten & Holger Sieg & Charles T. Clotfelter, 2002. "Charitable Giving, Income, and Taxes: An Analysis of Panel Data," American Economic Review, American Economic Association, vol. 92(1), pages 371-382, March.
    33. Yamamura, Eiji, 2012. "Social capital, household income, and preferences for income redistribution," European Journal of Political Economy, Elsevier, vol. 28(4), pages 498-511.
    34. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 489-520.
    35. Fong, Christina, 2001. "Social preferences, self-interest, and the demand for redistribution," Journal of Public Economics, Elsevier, vol. 82(2), pages 225-246, November.
    36. Klor, Esteban F. & Shayo, Moses, 2010. "Social identity and preferences over redistribution," Journal of Public Economics, Elsevier, vol. 94(3-4), pages 269-278, April.
    37. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing Charitable Giving with Rebates or Matching: Further Laboratory Evidence," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 794-807, April.
    38. Dora L. Costa & Matthew E. Kahn, 2003. "Understanding the American Decline in Social Capital, 1952–1998," Kyklos, Wiley Blackwell, vol. 56(1), pages 17-46, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ogawa, Akinobu & Kondoh, Haruo, 2024. "How Does Intergovernmental Competition through the Hometown Tax Donation System Affect Local Government Efficiency?," MPRA Paper 121688, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eiji Yamamura & Yoshiro Tsutsui & Fumio Ohtake, 2017. "Altruistic and selfish motivations of charitable giving:Case of the hometown tax donation system in Japan," ISER Discussion Paper 1003, Institute of Social and Economic Research, Osaka University.
    2. Yamamura, Eiji & Tsutsui, Yoshiro & Ohtake, Fumio, 2018. "Altruistic and selfish motivations of charitable giving: The case of the hometown tax donation system (Furusato nozei) in Japan," MPRA Paper 86181, University Library of Munich, Germany.
    3. Eiji Yamamura, 2015. "Effects of Siblings and Birth Order on Income Redistribution Preferences: Evidence Based on Japanese General Social Survey," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(2), pages 589-606, April.
    4. Yamamura, Eiji, 2012. "Effects of siblings and birth order on income redistribution preferences," MPRA Paper 38658, University Library of Munich, Germany.
    5. Eiji Yamamura, 2015. "Norm for redistribution, social capital, and perceived tax burden: comparison between highand low-income households," Review of Economics and Institutions, Università di Perugia, vol. 6(2).
    6. Philip H. Brown & Jessica H. Minty, 2008. "Media Coverage and Charitable Giving after the 2004 Tsunami," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 9-25, July.
    7. Roman M. Sheremeta & Neslihan Uler, 2021. "The impact of taxes and wasteful government spending on giving," Experimental Economics, Springer;Economic Science Association, vol. 24(2), pages 355-386, June.
    8. Yamamura, Eiji, 2011. "Effect of social capital on income distribution preferences: comparison of neighborhood externality between high- and low-income households," MPRA Paper 32557, University Library of Munich, Germany.
    9. Peter G. Backus & Nicky L. Grant, 2019. "How sensitive is the average taxpayer to changes in the tax-price of giving?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(2), pages 317-356, April.
    10. Naomi E. Feldman, 2010. "Time Is Money: Choosing between Charitable Activities," American Economic Journal: Economic Policy, American Economic Association, vol. 2(1), pages 103-130, February.
    11. Philip Brown & Jessica Minty, 2006. "Media Coverage & Charitable Giving After the 2004 Tsunami," William Davidson Institute Working Papers Series wp855, William Davidson Institute at the University of Michigan.
    12. Dimant, Eugen, 2015. "On Peer Effects: Behavioral Contagion of (Un)Ethical Behavior and the Role of Social Identity," MPRA Paper 68732, University Library of Munich, Germany.
    13. Daniel M. Hungerman & Mark Ottoni-Wilhelm, 2021. "Impure Impact Giving: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 129(5), pages 1553-1614.
    14. Qian Weng & Haoran He, 2018. "Geographic Distance, Income And Charitable Giving: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(05), pages 1145-1169, May.
    15. Tina Haussen, 2018. "Intra-Household Income Inequality and Preferences for Redistribution," Jena Economics Research Papers 2018-004, Friedrich-Schiller-University Jena.
    16. Zachary Halberstam & James R. Hines Jr., 2023. "Quality-Aware Tax Incentives for Charitable Contributions," CESifo Working Paper Series 10250, CESifo.
    17. Joan Costa-Font & Frank Cowell, 2015. "Social Identity And Redistributive Preferences: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 357-374, April.
    18. Ackfeld, Viola & Ockenfels, Axel, 2021. "Do people intervene to make others behave prosocially?," Games and Economic Behavior, Elsevier, vol. 128(C), pages 58-72.
    19. Benediktson, Mathias Nylandsted, 2018. "Investigating the U-Shaped Charitable Giving Profile Using Register-Based Data," DaCHE discussion papers 2018:1, University of Southern Denmark, Dache - Danish Centre for Health Economics.
    20. Tina Haussen, 2019. "Intra-household income inequality and preferences for redistribution," Review of Economics of the Household, Springer, vol. 17(2), pages 499-530, June.

    More about this item

    Keywords

    Altruism; Hometown tax donation; Self-interest; Redistribution;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jecrev:v:74:y:2023:i:1:d:10.1007_s42973-021-00083-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.