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Subsidy Schemes and Charitable Contributions: A Closer Look

Published online by Cambridge University Press:  14 March 2025

Douglas D. Davis ,
Edward L. Millner  and
Robert J. Reilly
Douglas D. Davis*
Affiliation:
Department of Economics, Virginia Commonwealth University, Richmond VA 23284-4000, USA
Edward L. Millner*
Affiliation:
Department of Economics, Virginia Commonwealth University, Richmond VA 23284-4000, USA
Robert J. Reilly*
Affiliation:
Department of Economics, Virginia Commonwealth University, Richmond VA 23284-4000, USA
*
email: [email protected]
email: [email protected]
email: [email protected]
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Abstract

This article replicates and “stress tests” a recent finding by Eckel and Grossman (2003) that matching subsidies generate substantially higher Charity Receipts than theoretically comparable rebate subsidies. In a first replication treatment, we show that most choices are consist with a “constant (gross) contribution” rule, suggesting that inattention to the subsidies’ differing net consequences may explain the higher revenues elicited with matching subsidies. Results of additional treatments suggest that (a) the charity dimension of the decision problems has little to do with the result, and (b) extra information regarding the net consequences of decisions reduces but does not eliminate the result.

Keywords

charitable givingexperimentsubsidies

JEL classification

D64: Altruism • Philanthropy • Intergenerational Transfers C91: Laboratory, Individual Behavior H24: Personal Income and Other Nonbusiness Taxes and Subsidies
Type
Research Article
Information
Experimental Economics , Volume 8 , Issue 2 , June 2005 , pp. 85 - 106
Copyright
Copyright © 2005 Economic Science Association

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References

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