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Are Political and Charitable Giving Substitutes? Evidence from the United States

Maria Petrova, Ricardo Perez-Truglia, Andrei Simonov, Pinar Yildirim

NBER Working Paper No. 26616
Issued in January 2020, Revised in January 2020
NBER Program(s):Public Economics, Political Economy

We provide evidence that individuals substitute between political contributions and charitable contributions, using micro data from the American Red Cross and Federal Election Commission. First, we find that foreign natural disasters, which are positive shocks to charitable giving, crowd out political giving. Second, we show that political advertisement campaigns, which are positive shocks to political giving, crowd out charitable giving. Our evidence suggests that individuals give to political and charitable causes to satisfy similar needs, and some of the drivers of charitable giving, such as other-regarding preferences, may be driving political giving too.

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Document Object Identifier (DOI): 10.3386/w26616

 
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