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Are Political and Charitable Giving Substitutes? Evidence from the United States

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  • Petrova, Maria
  • Yildirim, Pinar
  • Simonov, Andrei
  • Perez-Truglia, Ricardo

Abstract

We provide evidence that individuals substitute between political contributions and charitable contributions, using micro data from the American Red Cross and Federal Election Commission. First, in a lab experiment, we show that information on the importance of charitable giving increases donations to charities and reduces donations to politics, while information on the importance of political campaigns has the opposite effect. We also show that similar results hold in observational data. We find that foreign natural disasters, which are positive shocks to charitable giving, crowd out political giving. We also find that political advertisement campaigns, which are positive shocks to political giving, crowd out charitable giving. Our evidence suggests that some individuals give to political and charitable causes to satisfy similar needs.

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  • Petrova, Maria & Yildirim, Pinar & Simonov, Andrei & Perez-Truglia, Ricardo, 2021. "Are Political and Charitable Giving Substitutes? Evidence from the United States," CEPR Discussion Papers 15907, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15907
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    Cited by:

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    2. Tatyana Deryugina & Benjamin M. Marx, 2021. "Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes," American Economic Review: Insights, American Economic Association, vol. 3(3), pages 383-398, September.
    3. Asatryan, Zareh & Joulfaian, David, 2022. "Taxes and Business Philanthropy in Armenia," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 914-930.
    4. Griffith, Alan & Noonen, Thomas, 2021. "Does Public Campaign Funding Crowd Out Private Donation Activity? Evidence from Seattle's Democracy Voucher Program," SocArXiv 9wtzs, Center for Open Science.
    5. Julia Cagé & Malka Guillot, 2021. "Is Charitable Giving Political? Evidence from Wealth and Income Tax Returns," Working Papers hal-03877993, HAL.
    6. Griffith, Alan & Noonen, Thomas, 2022. "The effects of public campaign funding: Evidence from Seattle’s Democracy Voucher program," Journal of Public Economics, Elsevier, vol. 211(C).

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    More about this item

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid

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