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A Greater Price for a Greater Good? Evidence that Consumers Pay More for Charity-Linked Products

Daniel W. Elfenbein
Olin Business School at Washington University

Brian McManus
University of North Carolina at Chapel Hill - Department of Economics

February 17, 2009

Abstract:
To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and non-charity auctions of otherwise identical products. Charity prices are 6% greater, on average, than non-charity prices. Bids below the closing price are also greater, as are bids by individuals bidding on identical charity and non-charity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities.

Keywords: Charity auctions, cause-related marketing, online auctions, corporate philanthropy

JEL Classifications: D44, H41, L81, M14, M31

Working Paper Series

Date posted: September 20, 2006 ; Last revised: March 03, 2009

Suggested Citation

Elfenbein, Daniel W. and McManus, Brian, A Greater Price for a Greater Good? Evidence that Consumers Pay More for Charity-Linked Products (February 17, 2009). Available at SSRN: http://ssrn.com/abstract=965007

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Contact Information

Brian McManus (Contact Author) University of North Carolina at Chapel Hill - Department of Economics ( email ) Chapel Hill, NC 27599 United States
Daniel W. Elfenbein Olin Business School at Washington University One Brookings Drive Campus Box 1133 St. Louis, MO 63130-4899 United States