Crowding-out voluntary contributions to public goods

Chan, Kenneth S.; Godby, Robert; Mestelman, Stuart; Müller, Rudolf

doi:10.1016/s0167-2681(01)00232-3

Cited by 68 publications

(48 citation statements)

References 13 publications

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“…Thus, there is imperfect crowding-out. In the literature the percentage of crowding is measured as the change in voluntary contributions divided by the change in the tax rate (see Chan et al, 2002). For the low tax treatment we measure (7.5-10.533)/5 = 60.7 percent crowding-out and in the high tax treatment we measure (4.036-10.533)/10 = 65 percent crowding-out.…”

Section: [Table 1 About Here]mentioning

confidence: 99%

“…We refer to this measure as the lump sum high tax in the high tax treatment and the lump sum low tax in the low tax treatment. Coding the variable in this format allows direct estimation of the percentage of crowding-out (see Chan et al, 2002). If is the dependent variable measuring voluntary contributions and is the lump sum tax rate, with relationship , then is a direct measure of crowding-outthe marginal change in voluntary donations given a marginal change in the tax rate for the respective treatment (rather than a discrete change if we were to use only dummy variables indicating treatment condition).…”

Section: [Table 1 About Here]mentioning

confidence: 99%

“…Previous experimental literature has addressed voluntary contributions to public goods (Andreoni, 1993;Cadsby et al, 2007;Chan et al, 2002;Croson and Marks 1998List and Lucking-Reiley, 2002;Jones and McKee, 2009;Rondeau et al, 1999;Rose et al, 2000;Walker et al, 2000). However, to the best of our knowledge there is no previous experimental study on different instruments for environmental fundraising in tourism destinations.…”

Section: Introductionmentioning

confidence: 99%

“…Different methods to fundraise projects by public administrations have been analyzed in the past from an experimental perspective. Some well accepted findings of this literature are: that the zero-contribution hypothesis is not validated (see Zelmer, 2003, for a meta-analysis of linear public goods), taxes can (at least partially) crowd-out voluntary donations (Andreoni, 1993;Chan et al, 2002), and public contributions complementing private donations (e.g. matching instruments or seed money) can increase the size or the number of donations (List and Lucking-Reiley, 2002).…”

Section: Introductionmentioning

confidence: 99%

“…His design was meant to present the most favorable circumstances for complete crowding-out, but Andreoni's results showed highest total contributions (voluntary and taxed contributions) from taxed groups. Chan et al (2002) conducted a similar laboratory experiment to Andreoni (1993), but with two tax levels. They analyzed the data considering a boundary effect resulting from censoring the range of possible values of voluntary donations as well as considering the possibility of a warm-glow effect.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

An Experimental Study for Environmental Fundraising in Majorca, Spain

López¹,

Blanco²,

Coleman³

2011

Experiments on Energy, the Environment, and Sustainability

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This paper tests the effectiveness of different institutions to fundraise for environmental projects at tourist destinations. We conduct a series of experiments with tourists visiting the Island of Majorca, Spain, and test the fundraising capacity of a voluntary donation scheme, two tax levels, and a matching instrument. Majorca is a major international tourism destination, but tourism activities continue to stress the natural environment making the destination less attractive. This is a common phenomenon in mature tourism destinations. In response, many destinations invest in projects to prevent environmental degradation or for environmental remediation. These projects are traditionally financed by means of public investment, with a consequent tax burden to residents. The most common alternative to fund environmental projects is shifting the tax burden to tourists through tourist-targeted taxation schemes. More recently, programs to gather voluntary donations from tourists have been implemented. In one treatment of our experiment, tourists are given the opportunity to make a voluntary donation to the local environmental organization involved in such projects. In high tax and low tax treatment, tourists are taxed some proportion of their initial endowment and then decide on their level of voluntary contributions from their remaining endowment. In a final treatment, the experimenters match, one-for-one, any voluntary donations. We test the crowding-out hypothesis of taxes over voluntary environmental donations and find imperfect crowding-out (from 60 to 65 percent for different tax levels). Finally, we explore potential crowding-in of matching instruments (widely used in non-tourism settings for fundraising campaigns), but do not find any support for the capacity of matching contributions to increase the level of donations. Because of imperfect crowding-out it may be reasonable to use voluntary donation programs and tourism taxes complementarily (instead of independently, as has been done in Majorca), to increase fundraising for environmental purposes.

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Section: [Table 1 About Here]mentioning

confidence: 99%

Section: [Table 1 About Here]mentioning

confidence: 99%