Generosity and Wealth: Experimental Evidence from Bogotá Stratification

CentER Discussion Paper No. 2019-031

41 Pages Posted: 14 Nov 2019

See all articles by Mariana Blanco

Mariana Blanco

affiliation not provided to SSRN

Patricio S. Dalton

Tilburg University - Center for Economic Research (CentER)

Date Written: November 5, 2019

Abstract

This paper combines laboratory experiments with a unique feature of the city of Bogotá to uncover the relationship between generosity and wealth. Bogotá is divided by law into six socio-economic strata which are close proxies of household wealth and income. We recruit subjects from different strata and run a series of double-blind dictator games where the recipient is the NGO Techo-Colombia, which builds transitional housing for homeless families. We identify the stratum of each subject anonymously and blindly, and match their donations with their stratum. In a first experiment we provide a fixed endowment to all participants and find that donations are significantly increasing with wealth. However, in a second experiment, we show that this is not because the rich are intrinsically more generous, but because the experimental endowment has lower real value for them. With endowments that are equivalent to their daily expenditures, the rich, the middle-class and the poor give a similar proportion of their stratum-equivalent endowment. Moreover, we find that the motivation to donate is similar across strata, where the generosity act is explained mainly by warm-glow rather than pure altruism.

Keywords: Charitable giving; Social stratification; Inequality; Social Preferences; Dictator game

JEL Classification: C91; D31; D64

Suggested Citation

Blanco, Mariana and Dalton, Patricio S., Generosity and Wealth: Experimental Evidence from Bogotá Stratification (November 5, 2019). CentER Discussion Paper No. 2019-031. Available at SSRN: https://ssrn.com/abstract=3481022 or http://dx.doi.org/10.2139/ssrn.3481022

Mariana Blanco (Contact Author)

affiliation not provided to SSRN

Patricio S. Dalton

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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