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Browsing by Subject "Out-of-pocket donations"

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    Impure Impact Giving: Theory and Evidence
    (National Bureau of Economic Research, 2018) Hungerman, Daniel M.; Ottoni-Wilhelm, Mark; Economics, School of Liberal Arts
    We present a new model of charitable giving where individuals regard out-of-pocket donations and the matches they induce as different. We show that match-price elasticities combine conventional price effects with the strength of warm glow, so that a match-price elasticity alone is insufficient to characterize preferences for giving. Match- and rebate-price elasticities will be different, but together they lead to new tests of underlying giving preferences. We estimate, for the first time, a match-price elasticity in a high-stakes setting together with a rebate elasticity induced by tax policy. The estimates reject extant models of giving but are consistent with the new theory.
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