DP9841 Charitable Giving and Nonbinding Contribution-level Suggestions: Evidence from a Field Experiment
|Author(s):||Maja Adena, Steffen Huck, Imran Rasul|
|Publication Date:||February 2014|
|Keyword(s):||charitable giving, field experiment, reference point|
|JEL(s):||C93, D12, D64|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9841|
When asking for donations, charitable organizations often suggest a potential amount to contribute. However, the evidence concerning the effects of such suggestions is scarce and inconsistent. Unlike the majority of earlier studies concerned with small-money solicitations, we examine the effect of larger nonbinding suggestions in the context of middle-range donations which are relevant in practice. In a randomized field experiment conducted in conjunction with the Bavarian State Opera, opera visitors received solicitation letters asking to support a social youth project organized by the opera house. The three different treatments were: no suggestion and suggestions of ?100 and ?200, respectively. Both suggestions were larger than average and median donations in this context. We find that suggested contribution levels substantially influence the distribution of donations actually received. The mean amounts given increase significantly if a suggestion is made. The increase is stronger in the ?200 treatment. On the other hand, the participation rate decreases if a suggestion is made. Overall, the returns from the campaign increase non-significantly when a suggestion is made. The solicitation was repeated a year later, without any suggestion. There is weak evidence that suggestions have a long-term effect on individual contribution-level decisions.