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Is More Information Always Better? An Experimental Study of Charitable Giving and Hurricane Katrina

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  • Catherine Eckel
  • Philip J. Grossman
  • Angela Milano

Abstract

We report results of an experiment designed to assess the impact of Hurricane Katrina on the pattern and level of charitable contributions of donors. The study includes an experimental measure of charitable giving and targets three charities: the American Red Cross, the Salvation Army, and Oxfam International. In the experiment subjects make allocation decisions from three endowments ($10, $20, and $50) and with four different matching subsidies (0%, 25%, 50%, and 100%), with the matching amount provided by the experimenter. Two locations (Texas and Minnesota) and two information conditions are used. Survey measures of sympathy, risk perceptions, and perceptions of Katrina victims are also collected. The probability and amount of giving are responsive to the experimental design parameters—the endowment and match. We find evidence of “Katrina overload” as those closest to the disaster respond negatively to Katrina‐related priming information. Perceptions of the psychological attitudes of the victims of the disaster have a significant effect on the amount given.

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  • Catherine Eckel & Philip J. Grossman & Angela Milano, 2007. "Is More Information Always Better? An Experimental Study of Charitable Giving and Hurricane Katrina," Southern Economic Journal, John Wiley & Sons, vol. 74(2), pages 388-411, October.
    • Handle: RePEc:wly:soecon:v:74:y:2007:i:2:p:388-411
    DOI: 10.1002/j.2325-8012.2007.tb00845.x
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    1. Kunreuther, Howard, 1996. "Mitigating Disaster Losses through Insurance," Journal of Risk and Uncertainty, Springer, vol. 12(2-3), pages 171-187, May.
    2. Catherine C. Eckel & Philip J. Grossman, 2000. "Volunteers and Pseudo-Volunteers: The Effect of Recruitment Method in Dictator Experiments," Experimental Economics, Springer;Economic Science Association, vol. 3(2), pages 107-120, October.
    3. 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.
    4. Bruno S. Frey & Iris Bohnet, 1999. "Social Distance and Other-Regarding Behavior in Dictator Games: Comment," American Economic Review, American Economic Association, vol. 89(1), pages 335-339, March.
    5. 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.
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    1. repec:hal:wpaper:hal-03974756 is not listed on IDEAS
    2. Nisvan Erkal & Lata Gangadharan & Nikos Nikiforakis, 2011. "Relative Earnings and Giving in a Real-Effort Experiment," American Economic Review, American Economic Association, vol. 101(7), pages 3330-3348, December.
    3. 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.
    4. Levin, Tova & Levitt, Steven D. & List, John A., 2023. "A Glimpse into the world of high capacity givers: Experimental evidence from a university capital campaign," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 644-658.
    5. yamamura, eiji, 2008. "Learning Effect And Social Capital: A Case Study Of Natural Disaster From Japan," MPRA Paper 10249, University Library of Munich, Germany.
    6. Fortuna Casoria & Fabio Galeotti & Marie Claire Villeval, 2024. "Trust and Social Preferences in Times of Acute Health Crisis," Annals of Economics and Statistics, GENES, issue 154, pages 5-50.
    7. Adena, Maja & Hager, Anselm, 2020. "Does online fundraising increase charitable giving? A nation-wide field experiment on Facebook," Discussion Papers, Research Unit: Economics of Change SP II 2020-302, WZB Berlin Social Science Center.
    8. Rosalina Palanca-Tan & Nelson Matthew P. Tan, 2023. "Charitable Giving Amidst the COVID-19 Pandemic: A Philippine Context," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 29(1), pages 49-62, May.
    9. 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.
    10. Schwirplies, Claudia, 2023. "Does additional demand for charitable aid increase giving? Evidence from Hurricane Sandy," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 53-73.

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