Price elasticity of giving in the Netherlands

In this paper we estimate price elasticities of giving in the Netherlands. We make use of price variation present in tax data available from 2001-2007. To address the problems of omitted variable bias and endogeneity we apply a regression discontinuity approach to compute local price and quasi elasticities. Using a number of extensions to previous studies we find significant but mixed results. Significant positive price elasticities indicate that people are not well aware of their current marginal tariffs. Only for people with stable income we estimate significant and consistent price effects. We conclude that RD is not a robust method to estimate elasticity, because of its sensitivity to irregularities in the tax system and the low amount of variation in the data on giving.