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The Economics of Donations and Enlightened Self-Interest

43 Pages Posted: 17 Sep 2002 Last revised: 15 May 2013

Andrea Buraschi

The University of Chicago; Imperial College Business School; Centre for Economic Policy Research (CEPR)

Francesca Cornelli

London Business School; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: May 1, 2013

Abstract

This paper is an empirical study of what motivates individuals to donate to a charity. It is based on a unique dataset from the English National Opera (ENO) which includes detailed information on attendance and both granted and actually consumed bene…ts by all donors. We …nd that individuals clearly respond to incentives. However, only some individuals are motivated exclusively by private bene…ts. As the ENO advertises that donations are used to fund new productions, we …nd evidence that individuals are indeed willing to fund public goods, even though they could potentially free-ride. Moreover, we …nd that donors who attend special events or new productions develop a loyalty towards the charity and increase their donations over time. Finally, individuals are sensitive to social pressure and network connections. These results can help charities to refocus the design of their fund-raising campaigns.

Keywords: Donations, altruism, charities, public good

JEL Classification: D1, D64, H41, L3

Suggested Citation

Buraschi, Andrea and Cornelli, Francesca, The Economics of Donations and Enlightened Self-Interest (May 1, 2013). Available at SSRN: https://ssrn.com/abstract=317688 or http://dx.doi.org/10.2139/ssrn.317688

Andrea Buraschi

The University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
7738347123 (Phone)

HOME PAGE: http://www.andreaburaschi.com/

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

HOME PAGE: http://www.andreaburaschi.com/

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Francesca Cornelli (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
+44 20 7262 5050 x3225 (Phone)
+44 20 7724 3317 (Fax)

HOME PAGE: http://www.lbs.ac.uk/faculty/fcornelli/

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

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