Altruism and Social Pressure in Charitable Giving
Social pressure is an important determinant of door-to-door giving.
In the United States alone, annual individual giving to charity exceeds 2 percent of GDP, with approximately 90 percent of people donating a total of more than $300 billion in 2008. While the stakes are clearly quite high, there is still disagreement on the precise factors that motivate some people to give and others to refrain from donating.
In Testing for Altruism and Social Pressure in Charitable Giving (NBER Working Paper No. 15629), authors Stefano DellaVigna, John List, and Ulrike Malmendier describe two types of motivation that may underlie charitable giving. If individuals give because they enjoy giving, for example because they care about a specific worthy cause, or they like the warm glow of giving, then altruism is the motivation. On the other hand, if a person does not want to say "no" to the solicitor and would avoid personal interaction with the solicitor if forewarned, then the motivation is social pressure.
To test for which of these motivations matters most, the authors design a field experiment involving door-to-door fundraising drives for two charities: a local childrens hospital, which has a reputation as a premier hospital for children, and an out-of-state charity, not known by most potential donors. Some of the 7,668 households in the towns surrounding Chicago that were approached in this experiment between April and October, 2008 were given an opportunity to avoid the solicitor. One group of households got a flyer on their doorknob that notified them a day in advance about the exact time of solicitation, so that they could avoid it. A second group also got the flyer, but it included a box that could be checked if the household did "not want to be disturbed."
The authors find that the flyer reduces the share of households opening the door by 10 to 25 percent. If the flyer allows checking a "Do Not Disturb" box, it reduces giving by 30 percent, mainly among donations smaller than $10. These findings suggest that social pressure is an important determinant of door-to-door giving.
The authors use the data collected in their field experiment to estimate the parameters of a structural model for consumer charitable behavior. This model suggests that the estimated social pressure cost of saying no to a solicitor is $3.50 for an in-state charity and $1.40 for an out-of-state charity."
-- Lester PickerThe Digest is not copyrighted and may be reproduced freely with appropriate attribution of source.