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Subsidizing Unit Donations: Matches, Rebates, and Discounts Compared

Diederich, Johannes ; Eckel, Catherine C. ; Epperson, Raphael ; Goeschl, Timo ; Grossman, Philip J.

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Abstract

An influential result in the literature on charitable giving is that matching subsidies dominate rebate subsidies in raising funds. We investigate whether this result extends to ‘unit donation’ schemes, a popular alternative form of soliciting donations. There, the donors’ choices are about the number of units of a charitable good to fund at a given unit price, rather than the amount of money to give. Comparing matches and rebates as well as simple discounts on the unit price, we find no evidence of dominance in our online experiment: The three subsidy types are equally effective overall. At a more disaggregate level, rebates lead to a higher likelihood of giving while matching and discount subsidies lead to larger donations by donors. This suggests that charities using a unit donation scheme enjoy additional degrees of freedom in choosing a subsidy type. Rebates merit additional consideration if the primary goal is to attract donors.

Item Type: Working paper
Series Name: Discussion Paper Series / University of Heidelberg, Department of Economics
Volume: 0697
Place of Publication: Heidelberg
Date Deposited: 22 Dec 2020 16:22
Date: December 2020
Number of Pages: 55
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 330 Economics
Controlled Keywords: Framing-Effekt, Subvention
Uncontrolled Keywords: charitable giving, unit donation, online field experiment, subsidies, framing
Schriftenreihe ID: Discussion Paper Series / University of Heidelberg, Department of Economics
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