Subsidizing charitable giving with rebates or matching: further laboratory evidence.1. Introduction Giving to charity is encouraged around the world by the use of rebate rebate, partial refund of the total price paid for goods or services. In the United States, rebates were historically given by railroads to favored shippers as a return on transportation charges. or matching subsidies. In Eckel Eckel may refer to:
DONATION, contracts. or as a matching amount. Rebate and matching subsidies that are equivalent in theory are shown to differ in practice: Contributions are significantly higher with matching subsidies than with rebate subsidies. Participants do not ignore the subsidies, but rather increase their contributions in response to larger endowments and lower prices of giving. However, price elasticities Price elasticities The percentage change in quantity divided by a percentage change in the price. Answers the question: How much will the demand for my product decrease if I raise prices by 10%? are higher when the price change is in the form of a matching amount. Several articles address aspects of our original design, which may have lacked transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. . Davis, Millner, and Reilly Reilly is a surname distinct from O'Reilly and Riley, and may refer to:
adj. Exhibiting a lack of attention; not attentive. in  at·ten , participants may fail to comprehend the
details of the decisions and instead adopt a rule of thumb, such as
giving a constant percentage of endowment A transfer, generally as a gift, of money or property to an institution for a particular purpose. The bestowal of money as a permanent fund, the income of which is to be used for the benefit of a charity, college, or other institution. . Other (less?) confused
participants, while not understanding the differences among the
decisions, may reason that they are different and require different
answers. They may give randomly different responses but, on average,
pass the same constant percentage. To lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. confusion, DMR provides participants tables that show for each possible allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as how much they would earn and how much the charity would receive. The extra information moved the results closer to that predicted by theory. However, DMR still report total contributions significantly greater under the matching subsidies than under the rebate subsidies. Davis and Millner (2004) (DM) tested rebate and matching subsidies for a private good: chocolate bars. Consistent with previous results, they find that participants purchased significantly more chocolate bars under the matching sales format. This result implies (logic) implies - (=> or a thin right arrow) A binary Boolean function and logical connective. A => B is true unless A is true and B is false. The truth table is A B | A => B ----+------- F F | T F T | T T F | F T T | T It is surprising at first that A => that the phenomenon is not due to some inherent aspect involved in giving to charity, as we had speculated in our 2003 article, but is more widespread. The laboratory studies above present participants with a menu of both rebate and matching subsidy choices, of which one is chosen for payment. This approach introduces the possibility the match]rebate difference arises because participants fail to distinguish sufficiently between the two types of subsidies (as DMR suggest). Participants may interpret a 50% rebate as identical to a 50% match rather than the truly equivalent 100% match. In an attempt to be consistent, subjects may unwittingly bias their decisions toward the observed result. To eliminate this potential source of confusion, we conducted a between-subject design experiment. In this design, each subject makes 12 allocation decisions, varying the endowment ($4, $6, and $7.50) and the price of giving ($1.00, $0.80, $0.75, $0.50). Half the participants are presented with the rebate options and half with the matching options. In all other aspects, the procedures are the same as EG's. Consistent with our earlier findings in EG, we report significantly higher contribution levels under match subsidies than under paired rebate subsidies. 2. Experimental Procedure: Between-Subject Design Four sessions consisting of 96 participants were conducted at Saint Cloud Saint Cloud, city (1990 pop. 48,812), seat of Stearns co. and also in Benton and Sherburne counties, central Minn., on the Mississippi River; inc. 1856. Agriculture (dairying, poultry, livestock, grain, soybeans, alfalfa) is important. State University (SCSU SCSU St Cloud State University SCSU Southern Connecticut State University (Southern) SCSU South Carolina State University (Orangeburg, South Carolina) SCSU Saint Cloud State University ). Recruitment and protocol followed standard procedures. A group monitor was chosen at random and paid a flat fee of $10 to observe and verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. that procedures were followed. (1) A protocol involving code numbers was used to preserve anonymity of decisions. Subjects chose 1 preferred charity from a list of 10 to receive their contributions. (2) One of 12 allocation problems, described below, was chosen at random for payment. Subjects also were given the opportunity to complete a charity recognition form, if they wished to receive acknowledgment acknowledgment, in law, formal declaration or admission by a person who executed an instrument (e.g., a will or a deed) that the instrument is his. The acknowledgment is made before a court, a notary public, or any other authorized person. from their charities. The allocation problem decision sheet consisted of 12 allocation problems that differed by endowment ($4, $6, and $7.50) and the cost to the participant of contributing $1 to the charity ($1, $0.80, $0.75, and $0.50). (3) In the rebate treatment sessions, contributions were rebated at the rates of 0, 20, 25, and 50%; in the match treatment sessions, contributions were matched at the rates of 0, 25, 33 1/3, and 100%. There were four versions of the decision sheet, each with a different random ordering of the decision problems. After all decisions were made, subjects completed the Self-Report Altruism altruism (ăl`tr  ĭz`əm), concept in philosophy and psychology that holds that the interests of others, rather than of the self, can motivate an individual. Scale (Rushton Rushton can refer to the following:
adj. Of or involving both social and economic factors. socioeconomic Adjective of or involving economic and social factors Adj. 1. characteristics, and a four-item manipulation Manipulation Dealing in a security to create a false appearance of active trading, in order to bring in more traders. Illegal. check questionnaire questionnaire, n a series of questions used to gather information. questionnaire, n a form usually filled out by patients that provides data concerning their dental and general health. . The contributions to each charity were then totaled, and the experimenter wrote checks to the charities. These were sealed in envelopes, along with the information on participants who chose to receive acknowledgments See About this product. . Both monitor and experimenter walked to a mailbox A simulated mailbox in the computer that holds e-mail messages. Mailboxes are stored on disk as a file of messages, a database of messages or as an individual file for each message. The standard mailboxes are usually In, Out, Trash and Junk (Spam). and deposited the envelopes. 3. Results In total, 90 participants made complete decisions, 46 for the match treatment and 44 for the rebate treatment. Table 1 provides a summary of the socioeconomic characteristics for the subject pool, which did not differ across treatments. Responses to manipulation check items were on a five-point Likert scale Likert scale A subjective scoring system that allows a person being surveyed to quantify likes and preferences on a 5-point scale, with 1 being the least important, relevant, interesting, most ho-hum, or other, and 5 being most excellent, yeehah important, etc ranging from 1 (strongly disagree) to 5 (strongly agree). As shown at the bottom of Table 1, participants indicated that they found the instructions clear and easy to follow, believed their anonymity was protected by the procedures, and that the donations really were sent to the charities. Table 2 reports the average amount received by the charities by endowment, price, and treatment. The last column reports the means test means test n. An investigation into the financial well-being of a person to determine the person's eligibility for financial assistance. means test Noun for equivalence of (3) and (4). Contributions in the no-subsidy allocation problems (Price = $1.00) did not significantly differ between the two treatments. Consistent with EG, for eight of the nine subsidy allocation problems, giving under the match subsidy is significantly greater than giving under the equivalent rebate subsidy. (4) In Table 3, we estimate the demand for charitable giving, using the commonly applied log-linear specification (e.g., Clotfelter 1980, 1989). The equation estimated is (1) ln[(CONTRIBUTIONS).sub.ij] = [a.sub.0] + [a.sub.1]ln[(ENDOWMENT).sub.ij] + [a.sub.2]ln[(PRICE).sub.ij] + [a.sub.3][X.sub.i] + [[epsilon].sub.ij]. where i= 1, ..., 90 (an index of participants) and j= 1, ..., 12 (an index of allocation problems) and the variables are defined as follows: CONTRIBUTIONS = dollar value of contribution received by the charity + $0.10;5 ENDOWMENT = dollar value of the endowment ($4, $6, or $7.50); PRICE = price of giving $1 to the charity ($0.50, $0.75, $0.80, or $1.00). X is a vector of individual characteristics affecting charitable giving, including AGE = age of the participant in years; SEX = sex of the participant (1 = male); RELIGION 1-4 = attends religious services, respectively, less than once a month, at least once a month but less than once a week, once a week, more than once a week (= 1 for relevant category); ACKNOWLEDGMENT = requested acknowledgment of gift from charity, 1 = yes; ALTRUISM SCORE = score on the Self-Report Altruism Scale. We estimate (1) using two-limit Tobit Tobit (tō`bĭt) [Gr. from Heb. Tobijah="God is my good"], book of the Old Testament Apocrypha, not included in the Hebrew Bible. It is the account of Tobit, a devout Jew in exile, and of his son Tobias. maximum likelihood. (6) Table 3 indicates that the estimated coefficients are stable across the three models estimated. Comparing models 1 and 2, a likelihood ratio test rejects the null A character that is all 0 bits. Also written as "NUL," it is the first character in the ASCII and EBCDIC data codes. In hex, it displays and prints as 00; in decimal, it may appear as a single zero in a chart of codes, but displays and prints as a blank space. hypotheses of no difference in the coefficients across subsidy treatments ([chi](3) = 30.2, p-value p-value, n in statistics, the probability that a random variable will be found to have a value equal to or greater than the observed value by chance alone. This value provides an objective basis from which to assess the relative change in the data. < 0.01). The difference is primarily in the price elasticity, which is greater for the matching subsidy. We compare models 2 and 3 to test whether inclusion of the control variables significantly adds to the explanatory ex·plan·a·to·ry adj. Serving or intended to explain: an explanatory paragraph. ex·plan power of the model. The likelihood ratio test rejects the null hypothesis null hypothesis, n theoretical assumption that a given therapy will have results not statistically different from another treatment. null hypothesis, n that the coefficients of the control variable are jointly equal to zero ([chi square chi square (kī), n a nonparametric statistic used with discrete data in the form of frequency count (nominal data) or percentages or proportions that can be reduced to frequencies. ](8) = 48.6, p-value < 0.0001). As in most dictator-game experiments, there is substantial heterogeneity het·er·o·ge·ne·i·ty n. The quality or state of being heterogeneous. heterogeneity the state of being heterogeneous. in the charitable giving behavior among the participants. Charitable giving is increasing in the endowment and decreasing in price. The marginal effects of ENDOWMENT and PRICE can be interpreted as the income and price elasticities of charitable giving. Considering the control variables, we find men are significantly less generous than women, consistent with our previous research (see Eckel and Grossman 1998). Older participants are less generous, and those participants who attend religious services more than once a week are significantly more generous. These results are consistent with EG. Participants scoring higher on the Self-Report Altruism Scale are slightly more generous. Finally, participants who requested acknowledgment for their contributions are significantly more generous. Comparing our results in this study with the results from EG, we find no difference in estimated income elasticities (0.8 in this study vs. 0.8 in EG). The estimated price elasticities are considerably higher in this study than in EG, though the relative difference between the rebate and match elasticities is smaller. Estimated price elasticity for the match subsidy (about 2.6) is about twice that for the rebate subsidy (about 1.2). By comparison, EG report rebate price elasticities for the match subsidy (0.94-1.07) that are about three times the rebate elasticity (0.30-0.34). The higher absolute magnitude absolute magnitude: see magnitude. and the smaller relative difference are consistent with improved understanding. A rule of thumb, such as the constant pass rate suggested by DMR, strictly interpreted, would imply price elasticities of zero for the rebate subsidy and one for the matching subsidy. The EG estimates are much closer to these values than the current study. Higher absolute magnitudes imply greater responsiveness responsiveness Medtalk The ability to respond to a stimulus. See Airway responsiveness. to price than is consistent with the constant pass rate model of behavior. If subjects treat equivalent subsidies equally, then the elasticities should be the same. While ours are statistically different, the relative magnitude is less than the previous study, indicating improved understanding. One alternative explanation for the increase in overall magnitude of the elasticity estimates is the difference in subject pools. Our original study was conducted at the University of Texas-Arlington (UTA uta see leishmaniasis. ), while this study was conducted in Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces at SCSU. Although the set of allocation problems differs between the two studies, Table 4 reports data for the problems common to both. In general, the UTA contributions tend to be larger, regardless of endowment, price, or subsidy types. However, the UTA contributions do not increase as dramatically with changes in price. While UTA contributions are significantly different for higher prices, when the price falls to $0.50, average giving is typically not significantly different between the two groups. This pattern is present in five of the six endowment/subsidy-type pairings. (7) 4. Conclusion The anomalous a·nom·a·lous adj. 1. Deviating from the normal or common order, form, or rule. 2. Equivocal, as in classification or nature. results in our original article raised several important issues. First, are the results internally valid--That is, is the result real or an artifact A distortion in an image or sound caused by a limitation or malfunction in the hardware or software. Artifacts may or may not be easily detectable. Under intense inspection, one might find artifacts all the time, but a few pixels out of balance or a few milliseconds of abnormal sound of our experimental design? Second is the issue of external validity External validity is a form of experimental validity.[1] An experiment is said to possess external validity if the experiment’s results hold across different experimental settings, procedures and participants. : Are our results replicable in the field? Third are the public-policy implications: Could total giving be increased by replacing the current rebate-based policy of the U.S. federal government be replaced by a subsidy-based policy of the same cost? Our research efforts (and those of DMR and DM) have attempted to address the first two issues. The results of DMR and DM suggest that confusion played a role in the previous results. This article adopted a between-subject design in an attempt to reduce any confusion created in the earlier studies by having participants make allocation decisions under both rebate and match subsidies. Participants participated in either the all-rebate or the all-match treatment. As in the earlier studies, the manipulation checks provided no indication of confusion on the part of the participants. This protocol confirms a role for confusion, but also indicates that confusion is not the only factor at work. We find that a protocol designed to decrease confusion produces results that are closer to theory, in that the relative price elasticies are closer, but maintains a strong, significant difference in subjects' responses to the two subsidies. In a companion paper (Eckel and Grossman 2005a), we simplify the environment further, presenting subjects with only one decision and allowing them to choose between a rebate and a match. These results, too, find higher levels of giving under the matching subsidy ($5.44 vs. $10.53 from a $20 endowment). At this point, we are satisfied that the results are internally valid: Higher giving under the matching subsidy is replicable and reasonably consistent across variations in the instructions. To address the issue of external validity, we have underway a series of field experiments involving a selection of four charitable organizations This article is about charitable organizations. For other uses of the word charity, see Charity. A charitable organization (also known as a charity) is an organization with charitable purposes only. : a public radio organization (Eckel and Grossman 2005b), two social service organizations (one religious and one secular Secular An adjective used to describe a long-term time frame, usually at least 10 years. Notes: For example, in his book "Stocks For the Long Run", Jeremy Siegel (finance professor at The Wharton School, University of Pennsylvania) argues that equity securities ), and a university. Preliminary results support the lab result of greater giving under the match subsidy. The policy issues remain to be addressed. Clearly, more work remains to fully understand the mechanisms behind the difference in responses to rebates and matching subsidies. Appendix CODE NUMBER-- INSTRUCTIONS (REBATE) You are asked to participate in a study of decision making. The study will last about 1 hour. You will receive compensation for your participation, which will be paid to you in cash at the end of the study. How you will be compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. is explained below. One of the persons in the room will be chosen at random to be the monitor for today's study. The monitor will be paid $10. The monitor will verify that the instructions, as they appear here, have been followed. Each subject has been given an ALLOCATION PROBLEM DECISION SHEET and an envelope (1) A range of frequencies for a particular operation. (2) A group of bits or items that is packaged and treated as a single unit. (3) See also pushing the envelope. . To ensure the anonymity of all subjects' decisions, each subject has been assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. randomly a five-digit code number. This number can be found at the top of the ALLOCATION PROBLEM DECISION SHEET. The code number is also written on the claim check attached to the ALLOCATION PROBLEM DECISION SHEET. Please keep this claim check and remember this number. You will collect your compensation for participating by this code number. The ALLOCATION PROBLEM DECISION SHEET contains a series of allocation problems. You will be asked to make an allocation decision for each problem. In each allocation problem, you are paired with another player. The other player is a charity of your choice (selected from a list of 10 charities). For each allocation problem, you have been given an endowment. You are asked to allocate To reserve a resource such as memory or disk. See memory allocation. this endowment between yourself and your charity of choice. Examples of Allocation Problems:
Pass to
Problem Endowment Keep for Self Charity
1 $5.00 For every dollar $3.00 $2.00
you pass to
the charity, the
experimenter
will refund to
you $0.25.
In this problem, you must divide $5.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive $1.00 and you will receive a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of $0.25. For instance, if you elect to keep $3.00 and pass $2.00, you will receive $0.50 (= .25 X $2.00) in refund. You will earn $3.50--the $3.00 you kept plus the $0.50 refund. Your designated charity will receive $2.00.
Pass to
Problem Endowment Keep for Self Charity
2 $8.00 For every dollar $2.50 $5.50
you pass to
the charity, the
experimenter
will refund to
you $0.20.
In this problem, you must divide $8.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive $1.00 and you will receive a refund of $0.20. For instance, if you elect to keep $2.50 and pass $5.50, you will receive $1.10 (= 0.20 x $5.50) in refund. You will earn $3.60--the $2.50 you kept plus the $1.10 refund. Your designated charity will receive $5.50.
Pass to
Problem Endowment Keep for Self Charity
3 $10.00 For every dollar $8.60 $1.40
you pass to
the charity, the
experimenter
will refund to
you $0.50.
In this problem, you must divide $ I 0.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive $1.00 and you will receive a refund of $0.50. For instance, if you elect to keep $8.60 and pass $1.40, you will receive $0.70 (= 0.50 x $1.40) in refund. You will earn $9.30--the $8.60 you kept plus the $0.70 refund. Your designated charity will receive $1.40. Important Note: In all cases, you can choose any amount to keep and any amount to pass, but the amount you keep plus the amount you pass must equal your endowment. After everyone has completed making their decisions, the monitor will select at random one of the allocation problems and the experimenters will carry out the decisions made for that allocation problem for all subjects. Attached to your ALLOCATION PROBLEM DECISION SHEET is an acknowledgment form. If you wish to relinquish your anonymity and receive recognition from your designated charity for your contribution, please complete this form completely. If you wish to remain anonymous Nameless. See anonymous post and anonymous Web surfing. , nothing further need be done. Please place the ALLOCATION PROBLEM DECISION SHEET in the provided envelope and seal the envelope. The experimenters will collect the envelopes at this time. After completing these tasks, the experimenters will hand out a questionnaire. Please write yourfive-digit code number on the survey form. Please note that the questionnaire will be used for research purposes only. After completing the questionnaire, please leave the questionnaire on your table. While you are completing the survey, the monitor and experimenters will be determining your compensation and donation to the charity. Your compensation will be sealed in an envelope with your code number on its face. You may pick up your envelope from the table located next to the exit at the end of the study. The monitor and experimenters will also calculate the total donation to each of the charities. The experimenters will make out checks for these amounts, and place them, along with any recognition slips, in addressed and stamped envelopes. The monitor and an experimenter will go to the nearest mailbox and drop the envelope in the mailbox. After signing the form that verifies that the study was conducted according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. instructions, the monitor is free to leave. If you have any questions about the procedures, please ask now. Before we begin, please read the following scenarios and answer the questions. Scenario 1: You have an endowment of $8.00. For every dollar passed to the charity, you receive a refund of $0.25. You keep $6.00 and pass $2.00. Question 1: How much will you earn? Question 2: How much will the charity receive'? Scenario 2: You have an endowment of $10.00. For every dollar passed to the charity, you receive a refund of $0.20. You keep $2.50 and pass $7.50. Question l: How much will you earn? Question 2: How much will the charity receive? Scenario 3: You have an endowment of $5.00. For every dollar passed to the charity, you receive a refund of $0.50. You keep $1.80 and pass $3.20. Question 1: How much will you earn? Question 2: How much will the charity receive? NUMBER -- CODE -- INSTRUCTIONS (MATCH) You are asked to participate in a study of decision making. The study will last about I hour. You will receive compensation for your participation, which will be paid to you in cash at the clad CLAD canine leukocyte adhesion disease. of the study. How you will be compensated is explained below. One of the persons in the room will be chosen at random to be the monitor for today's study. The monitor will be paid $10. The monitor will verify that the instructions, as they appear here, have been followed. Each subject has been given an ALLOCATION PROBLEM DECISION SHEET and an envelope. To ensure the anonymity of all subjects' decisions, each subject has been assigned randomly a five-digit code number. This number can be found at the top of the ALLOCATION PROBLEM DECISION SHEET. The code number is also written on the claim check attached to the ALLOCATION PROBLEM DECISION SHEET. Please keep this claim check and remember this number. You will collect your compensation for participating by this code number. The ALLOCATION PROBLEM DECISION SHEET contains a series of allocation problems. You will be asked to make an allocation decision for each problem. In each allocation problem, you are paired with another player. The other player is a charity of your choice (selected from a list of 10 charities). For each allocation problem, you have been given an endowment. You are asked to allocate this endowment between yourself and your charity of choice. Examples of Allocation Problems:
Pass to
Problem Endowment Keep for Self Charity
1 $5.00 For every dollar $3.00 $2.00
you pass to
the charity, the
experimenter
will match it
with additional
$1.00.
In this problem, you must divide $5.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive an additional $1.00 from the experimenter. For instance, if you elect to keep $3.00 and pass $2.00, you will earn $3.00 and your designated charity will receive $4.00-$2.00 from you plus an additional $2.00 (- 1 x $2) from the experimenter.
Pass to
Problem Endowment Keep for Self Charity
2 $8.00 For every dollar $3.50 $4.50
you pass to
the charity, the
experimenter
will match it
with additional
$0.33.
In this problem, you must divide $8.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive an additional $0.33 from the experimenter. For instance, if you elect to keep $3.50 and pass $4.50, you will earn $3.50 and your designated charity will receive $6.00-$4.50 from you plus an additional $1.50 (= 0.33 x $4.50) from the experimenter.
Pass to
Problem Endowment Keep for Self Charity
3 10.00 For every dollar $6.80 $3.20
you pass to
the charity, the
experimenter
will match it
with additional
$0.25.
In this problem, you must divide $10.00. You can keep it all, keep some and pass some, or pass it all. For every dollar you pass, your charity of choice will receive an additional $0.25 from the experimenter. For instance, if you elect to keep $6.80 and pass $3.20, you will earn $6.80 and your designated charity will receive $4.00-$3.20 from you plus an additional $0.80 (= 0.25 x $3.20) from the experimenter. Important Note: In all cases, you may choose any amount to keep and any amount to pass, but the amount you keep plus the amount you pass must equal your endowment. After everyone has completed making their decisions, the monitor will select at random one of the allocation problems and the experimenters will carry out the decisions made for that allocation problem for all subjects. Attached to your ALLOCATION PROBLEM DECISION SHEET is an acknowledgment form. If you wish to relinquish your anonymity and receive recognition from your designated charity for your contribution, please complete this form completely. If you wish to remain anonymous, nothing further need be done. Please place the ALLOCATION PROBLEM DECISION SHEET in the provided envelope and seal the envelope. The experimenters will collect the envelopes at this time. After completing these tasks, the experimenters will hand out a questionnaire. Please write yourfive-digit code number on the survey form. Please note that the questionnaire will be used for research purposes only. After completing the questionnaire, please leave it on your table. While you are completing the survey, the monitor and experimenters will be determining your compensation and donation to the charity. Your compensation will be sealed in an envelope with your code number on its face. You may pick up your envelope from the table located next to the exit at the end of the study. The monitor and experimenters will also calculate the total donation to each of the charities. The experimenters will make out checks for these amounts, and place them, along with any recognition slips, in addressed and stamped envelopes. The monitor and an experimenter will go to the nearest mailbox and drop the envelope in the mailbox. After signing the form that verifies that the study was conducted according to instructions, the monitor is free to leave. If you have any questions about the procedures, please ask now. Before we begin, please read the following scenarios and answer the questions. Scenario 1: You have an endowment of $8.00. For every dollar passed to the charity, the charity will receive an additional $0.25 from the experimenter. You keep $2.00 and pass $6.00. Question 1: How much will you earn? -- Question 2: How much will the charity receive? -- Scenario 2: You have an endowment of $7.50. For every dollar passed to the charity, the charity will receive an additional $1.00 from the experimenter. You keep $7.00 and pass $0.50. Question 1: How much will you earn? -- Question 2: How much will the charity receive? -- Scenario 3: You have an endowment of $5.00. For every dollar passed to the charity, the charity will receive an additional $0.33 from the experimenter. You keep $3.20 and pass $1.80. Question 1: How much will you earn? -- Question 2: How much will the charity receive? -- NUMBER -- CODE -- ALLOCATION PROBLEM DECISION SHEET For this study, each of you will be paired with a charity of your choice. Following is a list of 10 possible charities. Please select the charity you wish to be paired with by placing an X in the box next to your choice. American Cancer Society American Cancer Society, n.pr established in 1913, this national volunteer-based health organization is committed to the elimination of cancer through prevention and treatment and to diminishing cancer suffering through advocacy, scholarship, research, Provides many services to cancer patients and their families, such as information, medical equipment, transportation to treatment locations, and a support system American Red Cross American Red Cross: see Red Cross. Offers blood donation “Give blood” redirects here. For other uses, see Give blood (disambiguation). Blood donation is a process by which a blood donor voluntarily has blood drawn for storage in a blood bank, generally for subsequent use in a blood transfusion. information and services, disaster relief, many helpful educational classes, as well as HIV/AIDS HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome support groups Big Brothers Big Sisters Provides one-to-one one-to-one adj. 1. Allowing the pairing of each member of a class uniquely with a member of another class. 2. Mathematics mentoring for youth and children residing in a one-parent family one-parent family n → familia monoparental one-parent family n → famille monoparentale one-parent family n → for the purpose of creating caring, confident, and competent Possessing the necessary reasoning abilities or legal qualifications; qualified; capable; sufficient. A court is competent if it has been given jurisdiction, by statute or constitution, to hear particular types of lawsuits. young adults Big River Sierra Club Sierra Club, national organization in the United States dedicated to the preservation and expansion of the world's parks, wildlife, and wilderness areas. Founded (1892) in California by a group led by the Scottish-American conservationist John Muir, the Sierra Club Protects and preserves environmentally sensitive areas An Environmentally Sensitive Area (ESA) is a type of designation for an agricultural area which needs special protection because of its landscape, wildlife or historical value. Central Minnesota Central Minnesota is the name of the region consisting of the central portion of the state of Minnesota. Although no specific boundaries of the region exist, most definitions of what makes up the region would generally consist of the vast swath of land north of Interstate 94, east Task Force on Battered bat·ter 1 v. bat·tered, bat·ter·ing, bat·ters v.tr. 1. To hit heavily and repeatedly with violent blows. 2. To subject to repeated beatings or physical abuse. 3. Women Offers safe shelter to battered women and their children, as well as food and clothing; assistance with legal, medical, and financial problems; and information/support groups Doctors Without Borders Doctors Without Borders, Fr. Médecins Sans Frontières (MSF), international organization that provides emergency medical assistance to people suffering from a natural or societal disaster, such as an earthquake or war. Doctors and nurses volunteer to provide urgent medical care in some 70 countries to civilian victims of war and disaster regardless of race, religion, or politics Feed the Children One of America's most effective charities providing food, clothing, medical care. education, and emergency relief to children in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and overseas since 1979 Minnesota AIDS Project Provides referrals to HIV-sensitive physicians, helps obtain/maintain medical coverage, support groups, legal services legal services n. the work performed by a lawyer for a client. , life-enhancement programs, toll-free information and referral line, and transportation services Oxfam Oxfam Oxford Committee for Famine Relief Oxfam n abbr (BRIT) (= Oxford Committee for Famine Relief) → OXFAM Oxfam n abbr (Brit) (= America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Invests privately raised funds and technical expertise in local organizations around the world that hold promise in their efforts to help the poor move out of poverty; committed to long-tern1 relationships in search of lasting solutions to hunger Hunger A term most commonly used to refer to the subjective feelings that accompany the need for food; however, the study of this topic has come to include consideration of the overall control of food intake. , poverty, and social inequities YMCA YMCA in full Young Men's Christian Association Nonsectarian, nonpolitical Christian lay movement that aims to develop high standards of Christian character among its members. Provides parent-visitation monitoring services The general surveillance of known air traffic movements by reference to a radar scope presentation or other means, for the purpose of passing advisory information concerning conflicting traffic or providing navigational assistance. and physical-fitness services REBATE Below are 12 allocation problems. Read each allocation problem carefully. For each allocation problem, you are given an endowment. You must decide how to allocate your endowment between yourself and your designated charity. You may either 1) Keep all for yourself; 2) Keep some for yourself and pass the remainder to the charity; or 3) Pass all of your endowment to the charity.
Keep Pass
for to
Problem Endowment Self Charity
1 $6.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.00
2 $4.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.20
3 $4.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.00
4 $6.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.50
5 $6.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.20.
6 $7.50 For every dollar you pass to
the charity, the experimenter
will refund to you $0.00
7 $4.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.25
8 $7.50 For every dollar you pass to
the charity, the experimenter
will refund to you $0.50
9 $7.50 For every dollar you pass to
the charity, the experimenter
will refund to you $0.20
10 $6.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.25
11 $4.00 For every dollar you pass to
the charity, the experimenter
will refund to you $0.50
12 $7.50 For every dollar you pass to
the charity, the experimenter
will refund to you $0.25
MATCH Below are 12 allocation problems. Read each allocation problem carefully. For each allocation problem, you are given an endowment. You must decide how to allocate your endowment between yourself and your designated charity. You may either 4) Keep it all for yourself; 5) Keep some for yourself and pass the remainder to the charity; or 6) Pass it all to the charity.
Problem Endowment
1 $6.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.00
2 $4.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.25
3 $4.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.00
4 $6.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$1.00
5 $6.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.25
6 $7.50 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.00
7 $4.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.33
8 $7.50 For every dollar you pass to the charity, the
experimenter will match it with an additional
$1.00
9 $7.50 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.25
10 $6.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.33
11 $4.00 For every dollar you pass to the charity, the
experimenter will match it with an additional
$1.00
12 $7.50 For every dollar you pass to the charity, the
experimenter will match it with an additional
$0.33
Problem Keep for Self Pass to Charity
1
2
3
4
5
6
7
8
9
10
11
12
SUBJECT SURVEY SHEET 1. Age -- 2. What is your sex? (Circle one number.) 01 Male 02 Female 3. Married? (Circle one number.) 01 YES 02 NO 4. Children? (Circle one number.) 01 YES 02 NO 5. Do you regularly attend religious services? 01 YES 02 NO 6. Which of the following categories best describes you? (Circle one number.) 01 Asian-American/Oriental 02 Black/African-American 03 White/Caucasian 04 Hispanic-Black/Spanish-speaking Black 05 Hispanic-White/Spanish-speaking White 06 Native American/American Indian 07 Other (Please specify: --) 7. Class (Circle one number) 01 Freshman 02 Sophomore 03 Junior 04 Senior 05 Graduate student 8. Major (Circle one number) 01 Economics 02 Other Business 03 Psychology 04 Sciences 05 Liberal Arts liberal arts, term originally used to designate the arts or studies suited to freemen. It was applied in the Middle Ages to seven branches of learning, the trivium of grammar, logic, and rhetoric, and the quadrivium of arithmetic, geometry, astronomy, and music. 06 Other 9. How many economics classes have you taken at the university level? (Circle one) None One Two Three Four Five Six More than six Please respond to items 10 through 13 by circling the number on the rating scale that best represents your opinion about that item. Your responses will remain completely anonymous.
Strongly Strongly
Disagree Agree
10. The procedures followed in 1 2 3 4 5
this experiment preserved
your anonymity
11. The money you passed to your 1 2 3 4 5
designated charity will be
sent to the charity
12. The instructions for the 1 2 3 4 5
experiment were clear and
easy to follow
13. The recipients of donations 1 2 3 4 5
to your designated charity
are deserving of support
References Clotfelter, Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by T. 1980. Tax incentives and charitable giving: Evidence from a panel of taxpayers. Journal of Public Economics 13:319-40. Clotfelter, Charles T. 1989. The impact of tax reform on charitable giving: A 1989 perspective. In Do taxes matter: The impact of the Tax Reform Act of 1986, edited ed·it tr.v. ed·it·ed, ed·it·ing, ed·its 1. a. To prepare (written material) for publication or presentation, as by correcting, revising, or adapting. b. by Joel Joel, book of the Bible Joel, prophetic book of the Bible. It is a collection of the oracles of an otherwise unknown prophet, dated variously from the 9th to the 3d cent. B.C., though a date in c.400 B.C. is likely. Slemrod. Cambridge Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , MA: MIT MIT - Massachusetts Institute of Technology Press, pp. 203-35. Davis, Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. D., and Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide L. Millner. 2005. Rebates, matches, and consumer behavior. Southern Economic' Journal 72:410-22. Davis, Douglas D., Edward L. Millner, and Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Reilly. 2005. Subsidy schemes and charitable contributions: A closer look. Experimental Economics 8:85-106. Eckel, Catherine C., and Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. J. Grossman. 1998. Are women less selfish self·ish adj. 1. Concerned chiefly or only with oneself: "Selfish men were . . . trying to make capital for themselves out of the sacred cause of human rights" Maria Weston Chapman. than men? Evidence from dictator dictator, originally a Roman magistrate appointed to rule the state in times of emergency; in modern usage, an absolutist or autocratic ruler who assumes extraconstitutional powers. From 501 B.C. until the abolition of the office in 44 B.C., Rome had 88 dictators. experiments. Economic Journal 108:726-35. Eckel, Catherine C., and Philip J. Grossman. 2003. Rebates and matching: Does how we subsidize sub·si·dize tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es 1. To assist or support with a subsidy. 2. To secure the assistance of by granting a subsidy. charitable contributions matter? Journal of Public Economics 87:681-701. Eckel, Catherine C., and Philip J. Grossman. 2005a. Do donors care about subsidy type? An experimental study. In Research in Experimental Economics, volume 2, edited by D. D. Davis and R. Mark Isaac R. Mark Isaac is an American academic who uses experimental economics to address basic microeconomic problems. His work has provided new empirical insights for many traditional economic problems, particularly cooperation and collective action problems. . New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of : JAI JAI Java Advanced Imaging JAI Justice et Affaires Interiéures (French: Justice and Home Affairs) JAI Journal of ASTM International JAI Just An Idea JAI Jazz Alliance International JAI Joint Africa Institute Press. Forthcoming. Eckel, Catherine C., and Philip J. Grossman. 2005b. Subsidizing charitable contributions: A field test comparing matching and rebate subsidies. Unpublished paper, Saint Cloud State University. Rushton, J. Philippe, Roland Roland (rō`lənd), the great French hero of the medieval Charlemagne cycle of chansons de geste, immortalized in the Chanson de Roland (11th or 12th cent.). D. Chrisjohn, and G. Cynthia Cynthia goddess of the moon. [Gk. Myth.: Kravitz, 72] See : Moon Fekken. 1981. The altruistic al·tru·ism n. 1. Unselfish concern for the welfare of others; selflessness. 2. Zoology Instinctive cooperative behavior that is detrimental to the individual but contributes to the survival of the species. personality and the self-report altruism scale. Personality and Individual Differences 2:292-302. (1) Details of the protocol are consistent with Eckel and Grossman (2003) except as noted. (2) A brief description of each charity was given to the participants. As in the EG article, the charities were selected to reflect as broad a range of services and client groups as possible. Though the list differed somewhat from EG's, it included a similar selection of international, national, and local organizations. (3) In EG, endowments were stated in terms of tokens (40, 60, 75, and 100), with tokens worth $0.10 each. In this experiment, the use of tokens was dropped and endowments were stated in dollars. (4) In the ninth, giving is greater under the match subsidy than under the rebate subsidy, but not significantly so. (5) Because the logarithm logarithm (lŏg`ərĭthəm) [Gr.,=relation number], number associated with a positive number, being the power to which a third number, called the base, must be raised in order to obtain the given positive number. of zero is not defined, it is customary in studies of the effect of the tax system on charitable giving to add a small amount ($10 is common) to the contribution, thereby allowing the dependent variable to be expressed as a logarithm. We have added only $0.10 rather than $10 to adjust for the fact that, in our study, the participants' endowments are quite small, rather than being their after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. net income. (6) Attempts to apply a random-effects model to the data proved unsuccessful, suggesting the data set is really not consistent with the random-effects model. The estimated sigma for the random-effects model was close to zero. We thank William Greene William Greene can mean:
(7) Comparing the two subject pools, the UTA participants were on average older (mean age: 23.33 vs. 20.09), more likely to be married (16.1% vs. 2.2%), to have children (10.9% vs. 2.2%), and to be non-Caucasian (50.8% vs. 10.0%). The UTA participants were more active religiously than their SCSU counterparts (38.7% vs. 22.2%). Catherine C. Eckel * and Philip J. Grossman ([dagger]) * School of Social Sciences, University of Texas at Dallas History The university was originally started as a research arm of Texas Instruments as the Graduate Research Center of the Southwest in 1961. The institute (by then renamed the Southwest Center for Advanced Studies) which at the time was located at Southern Methodist , Mail Station GR31, 2601 North Floyd Floyd is a variant spelling of the Welsh name Lloyd, which means grey, and may refer to: Places
(networking) edu - ("education") The top-level domain for educational establishments in the USA (and some other countries). E.g. "mit.edu". The UK equivalent is "ac.uk". . ([dagger]) Department of Economics, St. Cloud State University, St. Cloud, MN 56301, USA; E-mail pgrossman@stcloudstate. edu; corresponding author. This research was supported by a grant from the John D. and Catherine T. MacArthur Foundation John D. and Catherine T. MacArthur Foundation, philanthropic institution founded 1978 by John D. MacArthur (1897–1978), owner of a prominent insurance company and other businesses, and his wife Catherine T. , Network on the Nature and Origin of Preferences and Norms Norms A fixed or ideal standard; normative or mean score for a particular age group. Mentioned in: Minnesota Multiphasic Personality Inventory, Psychological Tests, Stanford-Binet Intelligence Scales, Wechsler Intelligence Test . We thank three anonymous referees for their helpful comments. Received October October: see month. 2004; accepted July July: see month. 2005.
Table 1. Summary Statistics (N = 90)
Mean Age (Standard Deviation [SD]) 20.09 (2.17)
Male 62.2%
Married 2.2%
Children 2.2%
Religious services
Never attend 21.1%
Less than once a month 36.7%
At least once a month 20.0%
Once a week 17.8%
More than once a week 4.4%
Non-Caucasian 10.0%
Class
Freshman 42.2%
Sophomore 23.3%
Junior 20.0%
Senior 10.0%
Graduate student 4.4%
Economics/business 47.8%
No. econ classes
0-1 63.3%
2-4 31.1%
>4 5.6%
Charity
American Cancer Society 28.9%
American Red Cross 6.7%
Big Brothers Big Sisters 15.6%
Big River Sierra Club 14.4%
Central Minnesota Task Force on Battered Women 7.8%
Doctors Without Borders 6.7%
Feed the Children 10.0%
Minnesota AIDS Project 1.1%
Oxfam America 4.4%
YMCA 4.4%
Acknowledgment 30.0%
Mean altruism score (SD) 40.3 (10.9)
Mean response (SD)
Procedures preserved anonymity? 4.50 (0.97)
Your donation went to your charity? 4.24 (1.13)
Instructions were clear? 4.36
Recipients of donation are deserving? 4.59 (1.00)
Table 2. Average Contribution by Endowment, Price, and Subsidy
Mean test
t-Statistic
Endowment Price Rebate Match p-Value <
$4.00 $1.00 $1.26 (1.43) $1.01 (1.02) 0.94 (0.17)
$0.80 $1.57 (1.15) $2.10 (1.22) 2.14 (0.02)
$0.75 $1.72 (1.31) $2.18 (1.26) 1.68 (0.05)
$0.50 $2.12 (1.27) $4.52 (2.24) 6.29 (0.001)
$6.00 $1.00 $1.69 (1.82) $1.31 (1.40) 1.13 (0.13)
$0.80 $2.73 (1.74) $2.93 (1.60) 0.56 (0.29)
$0.75 $2.52 (1.70) $3.18 (1.81) 1.78 (0.04)
$0.50 $2.97 (1.73) $6.11 (3.43) 5.51 (0.001)
$7.50 $1.00 $2.18 (2.24) $2.11 (2.01) 0.15 (0.44)
$0.80 $2.81 (1.92) $3.95 (2.19) 2.62 (0.005)
$0.75 $2.76 (1.97) $3.93 (2.59) 2.42 (0.009)
$0.50 $3.41 (1.89) $8.18 (4.17) 7.03 (0.001)
Table 3. Regression Results--Censored Tobit Maximum Likelihood
Coefficient (t-Stat)
Elasticity-Marginal Effect
Variable Model 1 Model 2
Endowment 0.987 * (5.83) 0.793
Rebate endowment -- 1.005 * (4.23) 0.814
Match endowment -- 0.973 * (4.20) 0.788
Price -2.366 * (13.34) -1.901
Rebate price -- -1.488 * (5.99) -1.205
Match price -- -3.184 * (13.07) -2.580
Age
Male --
Religion 1 --
Religion 2
Religion 3
Religion 4
Acknowledgment --
Altruism score --
Constant -1.846 * (6.13)
Rebate constant -1.727 * (4.08)
Match constant -1.959 * (4.75)
Log Likelihood
Function -1775.7 -1760.6
N 1080 1080
Variable Model 5
Endowment
Rebate endowment 0.999 * (4.28) 0.816
Match endowment 0.975 * (4.29) 0.796
Price
Rebate price -1.491 * (6.12) -2.593
Match price -3.174 * (13.31) -2.593
Age -0.050 * (2.24)
Male -0.422 * (4.61)
Religion 1 0.103 (0.85)
Religion 2 0.093 (0.70)
Religion 3 -0.26 (1.78)
Religion 4 1.046 * (4.20)
Acknowledgment 0.267 * (2.71)
Altruism score 0.247 (1.50)
Constant
Rebate constant -1.459 (1.83)
Match constant -1.752 * (2.22)
Log Likelihood
Function 1736.3
N 1080
* Significant at the 95% level or better, two-tailed test.
Table 4. Comparison of UTA and SCSU Participants
Rebate
Donations
(Standard Deviation) Means Test
t-Stat.
Endowment Price UTA SCSU (p-Value <) (a)
$4.00 $0.80 $2.02 (1.31) $1.57 (1.15) 2.24 (0.03)
$0.50 $2.22 (1.15) $2.12 (1.27) 0.47 (0.64)
$6.00 $1.00 (b) $2.84 (1.96) $1.69 (1.82) 3.67 (0.01)
$0.75 $3.05 (1.82) $2.52 (1.70) 1.81 (0.08)
$7.50 $0.75 $3.89 (2.32) $2.76 (1.97) 3.25 (0.01)
$0.50 $3.92 (2.28) $3.41 (1.89) 1.52 (0.14)
Match
Donations
(Standard Deviation) Means Test
t-Stat.
Endowment Price UTA SCSU (p-Value <) (a)
$4.00 $0.80 $2.64 (1.65) $2.10 (1.22) 2.41 (0.02)
$0.50 $4.10 (2.55) $4.52 (2.24) 1.07 (0.29)
$6.00 $1.00 (b) $2.84 (1.96) $1.31 (1.40) 5.89 (0.01)
$0.75 $3.76 (2.51) $3.18 (1.81) 1.73 (0.09)
$7.50 $0.75 $4.71 (3.10) $3.93 (2.59) 1.70 (0.10)
$0.50 $7.71 (4.73) $8.18 (4.17) 0.64 (0.52)
(a) Significant differences in bold type (two-tailed test).
(b) The UTA $6.00 endowment/$1.00 price is for the no-subsidy
allocation problem.
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