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Dimensions of Donation Preferences: The Structure of Peer and Income Effects

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  • Michalis Drouvelis
  • Benjamin M. Marx
Abstract
Charitable donations provide positive externalities and can potentially be increased with an understanding of donor preferences. We obtain a uniquely comprehensive characterization of donation motives using an experiment that varies treatments between and within subject. Donations are increasing in peers’ donations, past subjects’ donations, and bonus income. These findings of peer and income effects do not extend to earned income, anonymous donations, or peers’ donations of bonus income. A model of an uncertain social norm for giving can explain the patterns here and in several strands of past research. Estimation of the model reveals substantial heterogeneity in subjects’ adherence to the norm and perceptions of its form. Correlations between these dimensions of preferences are such that charities with perfect information could increase net revenue using targeted give-aways to certain donors. A simpler fundraising strategy using only the social dimension of donor preferences increases donations by 30 percent.

Suggested Citation

  • Michalis Drouvelis & Benjamin M. Marx, 2019. "Dimensions of Donation Preferences: The Structure of Peer and Income Effects," CESifo Working Paper Series 7496, CESifo.
    • Handle: RePEc:ces:ceswps:_7496
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    Cited by:

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    3. Drouvelis, Michalis & Marx, Benjamin M., 2022. "Can charitable appeals identify and exploit belief heterogeneity?," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 631-649.
    4. Kee, Jennifer & Segovia, Michelle S. & Saboury, Piruz & Palma, Marco A., 2022. "Appealing to generosity to reduce food calorie intake: A natural field experiment," Food Policy, Elsevier, vol. 110(C).
    5. Zhang, Yinjunjie & Hoffmann, Manuel & Sara, Raisa & Eckel, Catherine, 2024. "Fairness preferences revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 223(C), pages 278-306.
    6. David Fielding & Stephen Knowles & Ronald Peeters, 2022. "In search of competitive givers," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1517-1548, April.
    7. Sautua, Santiago I., 2022. "Donation requests following a pay rise," Journal of Economic Psychology, Elsevier, vol. 90(C).
    8. Grodeck, Ben & Grossman, Philip J., 2024. "Instantaneous positive reinforcement does not increase donations: Evidence from online experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 222(C), pages 446-460.
    9. Ryo Takahashi & Kenta Tanaka, 2021. "Social punishment for breaching restrictions during the COVID‐19 pandemic," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1467-1482, October.
    10. Catherine C. Eckel & Hanna G. Hoover & Erin L. Krupka & Nishita Sinha & Rick K. Wilson, 2023. "Using social norms to explain giving behavior," Experimental Economics, Springer;Economic Science Association, vol. 26(5), pages 1115-1141, November.
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    13. Michalis Drouvelis & Adam Isen & Benjamin M. Marx, 2019. "The Bonus-Income Donation Norm," CESifo Working Paper Series 7961, CESifo.

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    More about this item

    Keywords

    charitable; donation; altruism; warm glow; social preferences; peer effects; experiment;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values

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