A Greater Price for a Greater Good? Evidence that Consumers Pay More for Charity-Linked Products
45 Pages Posted: 20 Sep 2006 Last revised: 3 Mar 2009
Date Written: February 17, 2009
To study whether consumers will pay more for products that generate charitable donations, we analyze data from eBay on charity and non-charity auctions of otherwise identical products. Charity prices are 6% greater, on average, than non-charity prices. Bids below the closing price are also greater, as are bids by individuals bidding on identical charity and non-charity products. Bidders appear to value charity revenue at least partially as a public good, as they submit bids earlier in charity auctions, stimulating other bidders to bid more aggressively. Our results help explain why firms may pledge charitable donations, green production, or similar activities.
Keywords: Charity auctions, cause-related marketing, online auctions, corporate philanthropy
JEL Classification: D44, H41, L81, M14, M31
Suggested Citation: Suggested Citation