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

See all articles by Daniel W. Elfenbein

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School

Brian McManus

University of North Carolina (UNC) at Chapel Hill - Department of Economics

Date Written: February 17, 2009

Abstract

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

Elfenbein, Daniel W. and McManus, Brian, A Greater Price for a Greater Good? Evidence that Consumers Pay More for Charity-Linked Products (February 17, 2009). Available at SSRN: https://ssrn.com/abstract=965007 or http://dx.doi.org/10.2139/ssrn.965007

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

HOME PAGE: http://www.elfenbein.net

Brian McManus (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Department of Economics ( email )

Chapel Hill, NC 27599
United States

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