On Modeling Voluntary Contributions to Public Goods

Abstract

This paper addresses four stylized facts that summarize data from experimental studies of voluntary contributions to provision of public goods. Theoretical propositions and testable hypotheses for voluntary contributions are derived from two models of social preferences, the inequity aversion model and the egocentric other-regarding preferences model. We find that the egocentric other-regarding preferences model with classical regularity properties can better account for the stylized facts that the inequity aversion model with non-classical properties.

Keywords: Voluntary contributions, public goods, social preferences, experiments

JEL Classification: C70, C91, D64, H41