Altruism and social pressure

Reading this paper (abstract below the fold) led me to think of something which no-doubt others have suggested before.  We would probably be able to get more money donated to charity by getting the tax office to establish authorised RSS feeds to verify the amount of money that individual tax payers paid to charity. That way there could be social competition to give more. Of course making it compulsory wouldn’t be a political goer, but it might get those donations to charity spiking up rather more!

Testing for Altruism and Social Pressure in Charitable Giving by Stefano DellaVigna, John A. List, Ulrike Malmendier – #15629 (HC HE IO LS PE)

Every year, 90 percent of Americans give money to charities. Is such generosity necessarily welfare enhancing for the giver? We present a theoretical framework that distinguishes two types of motivation: individuals like to give, e.g., due to altruism or warm glow, and individuals would rather not give but dislike saying no, e.g., due to social pressure. We design a door-to-door fund-raising drive in which some households are informed about the exact time of solicitation with a flyer on their door-knobs; thus, they can seek or avoid the fund-raiser.

We find that the flyer reduces the share of households opening the door by 10 to 25 percent and, if the flyer allows checking a `Do Not Disturb’ box, reduces giving by 30 percent. The latter decrease is concentrated among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving. Combining data from this and a complementary field experiment, we structurally estimate the model. The estimated social pressure cost of saying no to a solicitor is $3.5 for an in-state charity and $1.4 for an out-of-state charity. Our welfare calculations suggest that our door-to-door fund-raising campaigns on average lower utility of the potential donors.

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