TY  - JOUR
AU  - Deb,Rahul
AU  - Gazzale,Robert S.
AU  - Kotchen,Matthew J.
TI  - Testing Motives for Charitable Giving: A Revealed-Preference Methodology with Experimental Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18029
PY  - 2012
Y2  - May 2012
UR  - http://www.nber.org/papers/w18029
L1  - http://www.nber.org/papers/w18029.pdf
N1  - Author contact info:
Rahul Deb
Department of Economics
University of Toronto
150 St George St, Toronto, ON, Canada
E-Mail: rahul.deb@utoronto.ca

Robert S. Gazzale
Department of Economics
Williams College
24 Hopkins Hall Dr
Williamstown, MA 01267
E-Mail: rgazzale@williams.edu

Matthew Kotchen
School of Forestry & Environmental Studies,
School of Management,
and Department of Economics
Yale University
195 Prospect Street
New Haven, CT 06511
Tel: 203/432-9533
Fax: 203/436-9150
E-Mail: matthew.kotchen@yale.edu
AB  - A large economics literature seeks to understand the reasons why individuals make charitable contributions. Fundamental features of most models of charitable giving are the inclusion of externalities induced by other agents and the Lancasterian characteristics approach to specifying utility functions. This paper develops a general, revealed-preference methodology for testing a variety of preference structures that allow for both externalities and characteristics. The tests are simple linear programs that are transparent, computationally efficient, and straightforward to implement. We show how the technique applies to standard models of privately provided public goods and novel models that account for social comparisons based on relative consumption and donations among individuals. We also conduct an original experiment that enables nonparametric tests of many models on a single data set. The results provide the first revealed-preference evidence on the importance of social comparisons when individuals make charitable contributions. Models that include preferences for either relative consumption or donations yield greater explanatory power than the standard model of impure altruism.
ER  -