Are Political and Charitable Giving Substitutes? Evidence from the United States

97 Pages Posted: 11 Jan 2020 Last revised: 15 Mar 2021

See all articles by Pinar Yildirim

Pinar Yildirim

University of Pennsylvania - The Wharton School

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management; Russian Presidential Academy of National Economy and Public Administration (RANEPA); Centre for Economic Policy Research (CEPR)

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE)

Ricardo Perez-Truglia

University of California, Berkeley; National Bureau of Economic Research (NBER)

Date Written: December 22, 2019

Abstract

We provide evidence that individuals substitute between political contributions and charitable contributions, using micro data from the American Red Cross and Federal Election Commission. First, in a lab experiment, we show that information on the importance of charitable giving increases donations to charities and reduces donations to politics, while information on the importance of political campaigns has the opposite effect. We also show that similar results hold in observational data. We find that foreign natural disasters, which are positive shocks to charitable giving, crowd out political giving. We also find that political advertisement campaigns, which are positive shocks to political giving, crowd out charitable giving. Our evidence suggests that some individuals give to political and charitable causes to satisfy similar needs.

Keywords: charitable giving, political contributions, altruism, media

JEL Classification: H41, L31

Suggested Citation

Yildirim, Pinar and Simonov, Andrei and Petrova, Maria and Perez-Truglia, Ricardo, Are Political and Charitable Giving Substitutes? Evidence from the United States (December 22, 2019). Available at SSRN: https://ssrn.com/abstract=3508534 or http://dx.doi.org/10.2139/ssrn.3508534

Pinar Yildirim (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management ( email )

645 N. Shaw Lane, 321 Eppley Center
East Lansing, MI 48824-1122
United States

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

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Vernadskogo Prospect 82
Moscow, 119571
Russia

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Ricardo Perez-Truglia

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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