Altruistic and Selfish Motivations of Charitable Giving: Case of the Hometown Tax Donation System

27 Pages Posted: 16 May 2017

See all articles by Eiji Yamamura

Eiji Yamamura

Seinan Gakuin University

Yoshiro Tsutsui

Osaka University - Graduate School of Economics

Fumio Ohtake

Osaka University - Institute of Social and Economic Research

Date Written: May 15, 2017

Abstract

In Japan’s hometown tax donation system, people can donate to municipalities where they are not resident and in return receive reciprocal gifts from the local governments of those municipalities. A large part of the donated amount can be deducted from their income and residence taxes. This study examined altruistic and selfish motivations in donating money to municipalities where people are not resident through that donation system; we did so using panel data of local governments for 2008–2015.

We made the following key findings:

(1) The Great East Japan earthquake increased the amount of money donated through that system for local governments with disaster victims. We considered that motivation altruistic.

(2) A 1% increase in expenditure for gifts to donors led to a 0.61% increase in donations. We considered that motivation selfish.

(3) Compared with donors not receiving gifts, providing gifts to donors led to a reduction in altruistic donations by almost 300%.

Keywords: Altruism, Charitable giving, Hometown tax donation, Warm glow, Self-interest, Redistribution

JEL Classification: D64, H23, H84, Z13

Suggested Citation

Yamamura, Eiji and Tsutsui, Yoshiro and Ohtake, Fumio, Altruistic and Selfish Motivations of Charitable Giving: Case of the Hometown Tax Donation System (May 15, 2017). ISER Discussion Paper No. 1003. Available at SSRN: https://ssrn.com/abstract=2968260 or http://dx.doi.org/10.2139/ssrn.2968260

Eiji Yamamura (Contact Author)

Seinan Gakuin University ( email )

6-2-92 Nishijin
Sawara-ku
Fukuoka 814-8511
Japan

Yoshiro Tsutsui

Osaka University - Graduate School of Economics ( email )

1-7 Machikaneyama
Toyonaka, 560-0043
Japan

Fumio Ohtake

Osaka University - Institute of Social and Economic Research ( email )

1-1 Yamadaoka
Suita
Osaka, 565-0871
Japan

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