Price elasticity in charity donations
In 2017, individual gifts were accountable for approximately 70% of all donations to charity in the USA. Prior literature identified several predictors of giving behavior, among which gender, age, income and education. This thesis aims to investigate the effect of providing additional information on the price elasticity of giving behavior. A survey was designed where subjects were asked to divide money between themselves and UNICEF, against different price ratios (1:1, 1:2 and 1:3) and with different initial amounts. Subjects within the treatment groups received either emotional or reference information before making their decisions about the deviation of money. The results show that females are more sensitive to changes in price compared to males, because they donate a significantly higher amount of money to charity when it becomes cheaper to donate. Moreover, the payoff to UNICEF from females is significantly higher in both treatment groups compared to males, suggesting that females are more sensitive to additional information. However, no hard evidence was found to conclude that donations within the treatments are higher in comparison with the control group.
|Keywords||charity, altruism, emotional/reference information, philanthropy, giving behavior, donations|
|Thesis Advisor||T. Wang|
P.B. Floberg. (2019, December 20). Price elasticity in charity donations. Business Economics. Retrieved from http://hdl.handle.net/2105/50527