Are Political and Charitable Giving Substitutes? Evidence from the United States
47 Pages Posted: 11 Jan 2020 Last revised: 25 Jan 2020
Date Written: December 22, 2019
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, we find that foreign natural disasters, which are positive shocks to charitable giving, crowd out political giving. Second, we show that political advertisement campaigns, which are positive shocks to political giving, crowd out charitable giving. Our evidence suggests that individuals give to political and charitable causes to satisfy similar needs, and some of the drivers of charitable giving, such as other-regarding preferences, may be driving political giving too.
Keywords: charitable giving, political contributions, altruism, media
JEL Classification: H41, L31
Suggested Citation: Suggested Citation