Andreoni–McGuire algorithm and the limits of warm-glow giving

Yıldırım, Hüseyin

doi:10.1016/j.jpubeco.2013.09.005

Cited by 24 publications

(17 citation statements)

References 28 publications

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“…In the limit as giving-by-others moves from a low level to a sufficiently high level, motives at the margin shift from impure altruism toward pure warm glow. Equivalently, in the limit crowd-out decreases toward zero (Ribar and Wilhelm 2002;Yildirim 2014). Hence, whether or not a crowd-out test rejects pure altruism depends on the level of giving-by-others at which the test is conducted.…”

Section: Introductionmentioning

confidence: 99%

Why Do People Give? Testing Pure and Impure Altruism

Ottoni-Wilhelm

Vesterlund

Xie

2014

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The extant experimental design to investigate warm glow and altruism elicits a single measure of crowdout. Not recognizing that impure altruism predicts crowd-out is a function of giving-by-others, this design's power to reject pure altruism varies with the level of giving-by-others, and it cannot identify the strength of warm glow and altruism preferences. These limitations are addressed with a new design that elicits crowd-out at a low and at a high level of giving-by-others. Consistent with impure altruism we find decreasing crowd-out as giving-by-others increases. However warm glow is weak in our experiment and altruism largely explains why people give.

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Section: Introductionmentioning

confidence: 99%

Why Do People Give? Testing Pure and Impure Altruism

Ottoni-Wilhelm

Vesterlund

Xie

2014

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“…Nonetheless, other researchers (Goeree et al, 2002;Palfrey & Prisbrey, 1997) found experimental evidence of the existence of pure altruism (demonstrated by complete crowding out of private contributions by a third party) in charitable giving. The extent of the crowding out was found to depend on the charity's output (Ottoni-Wilhelm, Vesterlund, & Xie, 2017;Ribar & Wilhelm, 2002;Yildirim, 2014).…”

Section: Literature Reviewmentioning

confidence: 97%

To what do people contribute? Ongoing operations vs. sustainable supplies

Arbel

Bar-El

Schwarz

et al. 2019

Journal of Behavioral and Experimental Economics

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We study how the objective of the contributions affects the willingness to contribute to real-life public goods. We conducted three treatments of a fundraising experiment among religious Jewish students in which the contributions were assigned to finance sustainable supplies and the ongoing operations of their campus synagogue. In each treatment, we informed the subject of the different allocation of their contributions between funding sustainable supplies and ongoing operations. The results show that contributions increase significantly with the share of contributions assigned to the procurement of sustainable supplies. We use the results to derive practical implications for the design of fundraising for public goods. JEL Classification:C73, C91, C92, H41

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“…Although a single incomplete crowd-out measurement appears indicative of the degree of departure from pure altruism, and of the weight placed on warm-glow, such inference is not correct. Building on the insights of Ribar and Wilhelm (2002) and Yildirim (2014), we show that under impure altruism the degree of crowd-out is sensitive to the charity's output level. Intuitively, as the charity's output increases, the marginal utility from further increasing output decreases, and so an impure altruist's marginal motive for giving shifts away from being influenced by altruism (the benefit of increasing output) toward being influenced by warm-glow (the private benefit of making the gift).…”

mentioning

confidence: 89%

Why Do People Give? Testing Pure and Impure Altruism

Ottoni-Wilhelm

Vesterlund

Xie

2017

American Economic Review

111

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Optimal designs of both public policy and fundraising mechanisms rely on the extent to which charitable donations are motivated by altruism and "warm-glow." Motives for giving influence donor responses to changes in public funding for projects, and influence the effectiveness of a wide range of solicitation strategies, such as the characteristics of the ask, whether past donations should be announced to future donors, and whether a charitable lottery is likely to increase the funds raised.To identify preferences for charitable giving, researchers center on measuring how much individual donations respond to, or are crowded out by, donations by others. We explore this central crowd-out test and demonstrate that it is not well suited for identifying preferences.The theory of pure altruism assumes that the sole motive for charitable giving is the utility derived from the charity's output, e.g., from children in need getting aid * Ottoni-Wilhelm: Department of Economics, Indiana University-Purdue University Indianapolis, 425 University Boulevard, CA516, Indianapolis, IN 46202 (email: mowilhelm@iupui.edu); Vesterlund: Department of Economics, University of Pittsburgh, 4928 WW Posvar Hall, Pittsburgh, PA 15260, and NBER (email: vester@ pitt.edu); Xie: Department of Economics, Concordia University, 1455 Maisonneuve Boulevard W, Montreal, QC H3G 1M8, Canada (email: huan.xie@concordia.ca). This paper was accepted to the AER under the guidance of Marianne Bertrand, Coeditor. We thank Kong Wah Lai, Michael Menietti, and Linnea Warren, who helped conduct the experiments. We thank Sandi Wraith and the American Red Cross of South Western Pennsylvania for their help in facilitating our research. We are grateful to Bo Honoré for extending his Stata code for the twosided fixed-effects censored estimator to models with variable censoring levels. We thank

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Andreoni–McGuire algorithm and the limits of warm-glow giving

Cited by 24 publications

References 28 publications

Why Do People Give? Testing Pure and Impure Altruism

Why Do People Give? Testing Pure and Impure Altruism

To what do people contribute? Ongoing operations vs. sustainable supplies

Why Do People Give? Testing Pure and Impure Altruism

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