Wednesday, February 1, 2012

Egoistic giving

Why do people give to charity? It could be because they care about others. It could be for tax reasons. It could be to offload some guilt. It could be to improve one's standing in society. It could be to encourage others to do the same. Or it could be a combination of all the above. In a more fundamental way, the question is whether philanthropy is egoistic or altruistic.

To address this, Dean Karlan and Margaret McConnell examines donors to Yale University. During a telephone campaign, some potential donors were told about the opportunity of being recognized as donor in the college's newsletter. They responded by giving more frequently (+3%) and more (+14%) than the control group. Variations in the amount necessary to be listed did not yield significant effects, though. One can conclude from this that people donate at least in part to elevate their status and/or to encourage others to give.

To disentangle to two, Karlan and McConnell use a better controlled environment, the laboratory. They work with undergraduates to see whether the latter are willing to part with US$5 to help fight AIDS, tuberculosis and malaria. In some rounds, donors are announced, but no difference in giving is noticed by varying the timing of the announcements. One can thus conclude that giving to encourage others to give is not an important factor, even with such small amounts.

1 comment:

elgrande said...

There is a recent paper in Theory and Decision by Reinstein and Riener, where we find evidence that people try to influence others in a charitable giving setup in the laboratory, and actually influence others’ donations, but only when the leader and followers meet face-to-face.