193/2014 Kimberley Scharf and Sarah Smith
We study charitable giving within social groups. Exploiting a unique dataset, we establish three key relationships between social group size and fundraising outcomes:(i) a positive relationship between group size and the total number of donations; (ii) anegative relationship between group size and the amount given by each donor; (iii) no relationship between group size and the total amount raised by the fundraiser. We rule out classic free-riding to explain these relationships since the number of social group members is only a subset of total contributors. Instead, the findings are consistent with the notion that giving in social groups is motivated by "relational" warm glow.
Behavioural Economics and Wellbeing
Journal of Public Economics