Skip to main content
Article
(Un)Informed Charitable Giving
Journal of Public Economics (2013)
  • Silvana Krasteva, Texas A & M University - College Station
  • Huseyin Yildirim, Duke University
Abstract
Evidence suggests little informed giving. To understand this behavior, we examine voluntary provision of a discrete public good with independent private values that can be ascertained at a cost. We find that an individual who considers a smaller contribution is less likely to learn her value, and thus the percentage of informed giving diminishes as the population grows. We also find that a direct grant to the charity exacerbates crowding-out by discouraging information acquisition whereas a matching grant increases donations by encouraging it. We further show that with costly information, a (first-order) stochastic increase in values can decrease donations; and that facilitating private acquisition of information can be a better fund-raising strategy than directly supplying it.
Disciplines
Publication Date
2013
Citation Information
Silvana Krasteva and Huseyin Yildirim. "(Un)Informed Charitable Giving" Journal of Public Economics Vol. 106 (2013) p. 14 - 26
Available at: http://works.bepress.com/huseyin_yildirim/18/