To Give or Not to Give: The Price of Contributing and the Provision of Public Goods

40 Pages Posted: 17 Aug 2013

See all articles by Johannes Diederich

Johannes Diederich

Heidelberg University - Alfred Weber Institute for Economics

Timo Goeschl

University of Heidelberg - Alfred Weber Institute for Economics

Date Written: August 2013

Abstract

We examine the relationship between the price of giving and the decision to contribute in a framed field experiment (n = 2,440). In a departure from previous research using match rates and rebates, we vary the price of contributing to the public good directly. Treatment groups differ between subjects by the amount of money subjects have to give up in order to provide one unit of the public good. In contrast to earlier results, the theoretical prediction of a clear negative relationship between price and the decision whether to contribute is borne out by the experimental evidence. We estimate the mean elasticity of the probability to contribute as -0.31. The direct price effect is robust across specifications including sociodemographic controls for the highly heterogenous, Internet-representative non-student sample of subjects.

Suggested Citation

Diederich, Johannes and Goeschl, Timo, To Give or Not to Give: The Price of Contributing and the Provision of Public Goods (August 2013). NBER Working Paper No. w19332, Available at SSRN: https://ssrn.com/abstract=2311581

Johannes Diederich (Contact Author)

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
Heidelberg, D-69115
Germany

Timo Goeschl

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
D-69115 Heidelberg
Germany

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