TESTING FOR ALTRUISM AND SOCIAL PRESSURE IN CHARITABLE GIVING

TESTING FOR ALTRUISM AND SOCIAL PRESSURE IN CHARITABLE GIVING

February 2012 | STEFANO DELLA VIGNA, JOHN A. LIST, ULRIKE MALMENDIER
The Quarterly Journal of Economics, Vol. 127, February 2012, Issue 1 Testing for Altruism and Social Pressure in Charitable Giving Stefano DellaVigna, John A. List, Ulrike Malmendier Every year, 90% 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, for example, due to altruism or warm glow, and individuals would rather not give but dislike saying no, for example, due to social pressure. We design a door-to-door fund-raiser in which some households are informed about the exact time of solicitation with a flyer on their doorknobs. Thus, they can seek or avoid the fund-raiser. We find that the flyer reduces the share of households opening the door by 9% to 25% and, if the flyer allows checking a Do Not Disturb box, reduces giving by 28% to 42%. 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 $3.80 for an in-state charity and $1.40 for an out-of-state charity. Our welfare calculations suggest that our door-to-door fund-raising campaigns on average lower the utility of the potential donors. The article presents a field experiment on door-to-door fundraising for two charities, a local children's hospital and an out-of-state charity. The experiment involved 7,668 households in the towns surrounding Chicago. The crucial aspect of the experimental design is to allow individuals to sort, that is, to either seek or avoid the solicitor. In our first treatment, a flyer on the doorknob notifies households one day in advance about the one-hour time interval in which a solicitor will arrive at their homes the next day. In the second treatment, opt-out, the flyer also includes a box to be checked if the household does not want to be disturbed. We compare these two conditions to a baseline treatment, wherein solicitors approach households in the usual manner without a flyer. We estimate the treatment effects on both the share of households that open the door and the share that give. The design allows for a simple test of (pure or impure) altruism versus social pressure in door-to-door giving. If altruism is the main driver of giving, the flyer should increase both the presence at home and giving. Because giving is utility-enhancing, givers should sort into staying at home, provided that alternative ways of donating to these charities require more effort. In addition, givers who would like to give in response toThe Quarterly Journal of Economics, Vol. 127, February 2012, Issue 1 Testing for Altruism and Social Pressure in Charitable Giving Stefano DellaVigna, John A. List, Ulrike Malmendier Every year, 90% 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, for example, due to altruism or warm glow, and individuals would rather not give but dislike saying no, for example, due to social pressure. We design a door-to-door fund-raiser in which some households are informed about the exact time of solicitation with a flyer on their doorknobs. Thus, they can seek or avoid the fund-raiser. We find that the flyer reduces the share of households opening the door by 9% to 25% and, if the flyer allows checking a Do Not Disturb box, reduces giving by 28% to 42%. 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 $3.80 for an in-state charity and $1.40 for an out-of-state charity. Our welfare calculations suggest that our door-to-door fund-raising campaigns on average lower the utility of the potential donors. The article presents a field experiment on door-to-door fundraising for two charities, a local children's hospital and an out-of-state charity. The experiment involved 7,668 households in the towns surrounding Chicago. The crucial aspect of the experimental design is to allow individuals to sort, that is, to either seek or avoid the solicitor. In our first treatment, a flyer on the doorknob notifies households one day in advance about the one-hour time interval in which a solicitor will arrive at their homes the next day. In the second treatment, opt-out, the flyer also includes a box to be checked if the household does not want to be disturbed. We compare these two conditions to a baseline treatment, wherein solicitors approach households in the usual manner without a flyer. We estimate the treatment effects on both the share of households that open the door and the share that give. The design allows for a simple test of (pure or impure) altruism versus social pressure in door-to-door giving. If altruism is the main driver of giving, the flyer should increase both the presence at home and giving. Because giving is utility-enhancing, givers should sort into staying at home, provided that alternative ways of donating to these charities require more effort. In addition, givers who would like to give in response to
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[slides and audio] Testing for Altruism and Social Pressure in Charitable Giving