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Title:What Motivates Giving in the Field?

Authors:Ulrike Malmendier

Abstract:

Why do people give to charity? We present a model of charitable giving that allows for two types of motivation: individuals like to give, e.g., due to altruism or warm glow, or individuals would rather not give but dislike saying no, e.g., due to social pressure. To distinguish the two types of motivation, we design a door-to-door fund-raising drive in which we vary the ability of households to seek or avoid a solicitor. Some households are informed about the exact time of solicitation with a flyer on the door-knob; thus, they can seek the fund-raiser if giving is welfare-enhancing, and avoid it if giving is welfare decreasing. We find that i) the notice on the door-knob reduces the share of households opening the door by 10 to 25 percent, suggesting that the average household seeks to avoid fund-raisers; (ii) the basic notice does not reduce giving, but a notice that allows to check a box for ‘Do Not Disturb’ reduces giving by 30 percent; (iii) the latter decrease is concentrated among donations smaller than $10. These findings suggest that both types of motivation affect charitable giving, with more evidence supporting the social pressure explanation. We also conduct an additional field experiment where we vary the payment and duration for completing a survey. We combine the results from both experiments to structurally estimate altruism and social pressure parameters.