DP3488 | Donations

Publication Date

20/08/2002

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Abstract

This paper is an empirical study of the motives for charitable donations, based on a unique data set of the English National Opera. Merging all their box office and fundraising data, our data set not only contains individuals? donations, but also their opera attendance and all the fringe benefits they consume (e.g. dress rehearsals). We can, therefore, study the three main reasons suggested in the literature to explain charitable giving. We find that individuals donate to fund a public good ? here, new productions ? to have access to a private good ? here, fringe benefits ? and by altruism. The results are important to learn the extent to which we can model charitable donations in a model with a self-interested utility maximizing agent in a strategic environment and to enhance our understanding of the crowding-out effect of public spending to charities and the arts.