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Contributions in heterogeneous communities: Evidence from Indonesia

Author

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  • Cagla Okten
  • Una Okonkwo Osili

Abstract

Using household-level data from Indonesia, we investigate the importance of community characteristics: ethnic diversity and central government transfers, inter alia, in determining monetary and time contributions to community organizations. We present a framework in which ethnic diversity affects contributions through three channels: (1) diversity of preferences (2) transaction costs, and (3) inter-household considerations in the form of altruism towards one’s ethnic group. Our empirical findings provide evidence that ethnic diversity has a negative and significant effect on contributions, and the prevalence of community organizations. We find evidence that government spending crowds out private monetary contributions, with a less robust effect on time contributions. Copyright Springer-Verlag 2004

Suggested Citation

  • Cagla Okten & Una Okonkwo Osili, 2004. "Contributions in heterogeneous communities: Evidence from Indonesia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 603-626, December.
    • Handle: RePEc:spr:jopoec:v:17:y:2004:i:4:p:603-626
    DOI: 10.1007/s00148-004-0189-y
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    Keywords

    O12; H41; J16; Z13; Ethnic diversity; contributions; transfers; community organizations;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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