Using Laboratory Experiments to Better Understand Voluntary Contributions
This dissertation covers three papers concerning voluntary contributions. There are competing theories as to why individuals contribute to projects which help others (e.g., charities); many of the theoretical models have at their core, that an individual is indifferent between giving time or money. We test this assumption in a laboratory (and other related phenomena concerning giving time and money to charity). Further, we test how individuals react to third-party information regarding charities. This is to help understand what impact, if any, a group's (e.g., Charity Navigator) positive rating of a charity has on the likelihood an individual will give to that charity. This question is important because it is often costly for a charity to become rated and there is no consensus that being rated will improve the donations they receive. A final paper studies a situation where individuals give to projects which help others that are not (normally) charities. These are government programs which improve the welfare of future generations (e.g., cleaner environment or education). In this context, I still study the voluntary contribution to such projects as opposed to compulsory contribution via taxation. The findings of this dissertation are, broadly, that there is a differential treatment of giving time and money to charity with individuals more willing to give larger amounts (in value) of time to charity. This document presents potential explanations which traditional economic models have ignored for this outcome. Additionally, the research shows that individuals have very small preferences for local charities when donating. This finding is important because our analysis controls for the impact of third-party evaluations of charities, which would naturally depress local giving. Even when positively rated by a third party, individuals were not statistically influenced to select a local charity; rather, past experience with a charity was most important for determine current donative behavior. Lastly, this dissertation investigates intergenerational public goods. Specifically, does debt financing increase the production of public goods and the impact on dynamic welfare. I find that future welfare is harmed when debt is used to finance these goods. There are multiple explanations for this outcome, the most likely being the intergenerational moral hazard problem.
voluntary contributions, charitable giving, warm glow, intergenerational resources
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