crowding in of complementary contributions to public goods firm investment into open source software abstract we present a fairly general model in which firms are competitors in a commercial market segment and can invest into a complementary public good like open source software we show that contrary to standard predictions additional contribution to the public good by the government or a new market entrant can lead to higher investments of all incumbent firms that is a crowding in effect this result occurs if the investment cost function is superadditive we find that government contribution leads to larger crowding in effects than subsidizing market entry if the price elasticity of demand with respect to the private good is large relative to the one with respect to the public good our results are robust to extensions in the timing and the mode of competition

estimating stated preferences with rated pair data environmental health and employment effects of energy programs abstract respondents stated preferences for attributes related to various electricity generation scenarios are analyzed using a series of pairwise ratings multiple observations for each respondent facilitate estimating individual scale parameters scale estimates can identify uninformative rating patterns and make it possible to delete such observations or adjust wtp calculations cross section time series analysis of the data indicates that nonprice attributes increase in salience during the course of the experiment thus later responses may be better indicators of preferences than earlier responses comparisons of polychotomous with dichotomous models indicate that most respondents relative preference ratings are not simply dichotomous but discriminate systematically along the rating scale

the supply of charity services by nonprofit hospitals motives and market structure this article studies provision of charity care by private nonprofit hospitals we demonstrate that in the absence of large positive income effects on charity care supply convex preferences for the nonprofit hospital imply crowding out by other private or government hospitals extending our model to include impure altruism rivalry provides a possible explanation for the previously reported empirical result that both crowding out and income effects on indigent care supply are often weak or insignificant empirical analysis of data for hospitals in maryland provides evidence of rivalry on the supply of charity care

status effects and environmental externalities abstract this paper examines a static competitive economy where the production of a consumption good generates pollution that adversely affects human welfare preferences are defined over consumption leisure pollution and economic status each person s status increases with her own consumption but decreases with the average consumption of society the achievement of a pareto efficient resource allocation requires a consumption tax to offset the incentive to overconsume in the pursuit of enhanced status in contrast with standard prescriptions the efficient pollution tax generally exceeds the sum of individuals marginal willingness to pay for pollution abatement these findings remain unaltered when preferences are modified to incorporate altruistic concern for others well being altruism however suggests a potential role for government intervention to achieve a desirable i e pareto efficient distribution of welfare between individuals

government subsidies to private spending on public goods this paper examines how the size of an efficient subsidy varies with the amount of free riding and the presence of distorting taxation ironically the existence of free riding where some individuals make no voluntary contribution at all reduces the size of an efficient subsidy and makes a subsidy more attractive compared to direct taxation for the gain to be significant the number of donors must be extremely few in number even when the gains from a subsidy relative to direct taxation are small a subsidy may dominate direct taxation because it can reveal an efficient level of the public good the analysis distinguishes between traditional public goods such as national defense and what i call transfer public goods where members of society care about the consumption of a particular group in society such as the poor i generalize the samuelson 1954 results to derive conditions for efficiency in providing transfer public goods

demand for charity donations in private non profit markets the case of the u k abstract this paper presents estimates of the demand for donations for u k charities in 1985 these estimates make demand depend upon price fund raising expenditure a quality index and alternative revenue sources the price elasticity of donations found here shows for the most part an elastic response and is consistent with previous studies using u s data our empirical results suggest that non profits in the u k unlike their counterparts in the u s are net revenue maximisers we discovered no significant evidence that public donations crowded out private donations in our sample of 300 charities

public good provision and ancillary benefits the case of climate agreements several studies found ancillary benefits of the provision of public goods to be of considerable size if these additional private benefits were noticed they would imply not only higher cooperative but also non cooperative provision levels however beyond these largely undisputed important quantitative effects there would be qualitative and strategic implications associated with ancillary benefits public policy would no longer be a pure but an impure public good in this paper we investigate these implications in a setting of non cooperative coalition formation in the context of climate change in particular we address the following question would ancillary benefits if they were taken in consideration increase participation in international climate agreements and raise the success of these treaties in welfare terms

volunteer work and club size nash equilibrium and optimality the non cooperative provision of public goods is analyzed in the context of a two stage game in which club size is determined endogenously equilibrium club size and voluntary labour supply are shown to be inefficient the impact of optimally chosen fiscal policies using simple instruments is studied when agents do not derive non pecuniary benefits from volunteer work lump sum grants can be used to implement the first best equal treatment allocation but private provision is fully crowded out otherwise it is found that simple fiscal instruments cannot implement the first best equal treatment allocation unless club size is directly regulated

public goods and minimum provision levels does the institutional formation affect cooperation we investigate experimentally the role of institutional formation on the implementation of a binding minimum contribution level to a public good groups either face the minimum level exogenously im

consumer preference for a no choice option the traditional focus in the decision making literature has been on understanding how consumers choose among a given set of alternatives the notion that preference uncertainty may lead to choice deferral when no single alternative has a decisive advantage is tested in seven studies building on recent research the article shows that the decision to defer choice is influenced by the absolute difference in attractiveness among the alternatives provided and is not consistent with trade off difficulty or the theory of search these findings are then extended to show that choice deferral can also be modified for the same alternatives by manipulations that make them appear more similar in attractiveness or that decrease the need to differentiate among them the results are consistent with the notion that preference uncertainty results in a hesitation to commit to any single action since small differences in attractiveness among the alternatives are potentially reversible consistent with this premise the effect of attractiveness difference on choice deferral decreased significantly when subjects were first allowed to practice making monetary trade offs among the available alternatives

on the effects of asymmetric and endogenous taxation in experimental public goods games abstract in our experimental public goods game subjects face exogenously or endogenously determined asymmetric minimum contributions endogeneity does not affect overall contributions if asymmetric contribution levels are approved of endogenously the disadvantaged subjects contribute significantly less than in case of exogenous determination

optimal design for multinomial choice experiments abstract the author derives d optimal designs for main effects multinomial choice experiments using attribute levels as design parameters the design solutions are similar to standard main effects designs except that one attribute is used to manipulate response probabilities the manipulator is key to implementing optimal designs in practice

crowding out voluntary contributions to public goods we test the null hypothesis that involuntary transfers for the provision of a public good will completely crowd out voluntary transfers against the warm glow hypothesis that crowding out will be incomplete because individuals care about giving our design differs from the related design used by andreoni in considering two levels of the involuntary transfer and a wider range of contribution possibilities and in mixing groups every period instead of every four periods we analyse the data with careful attention to boundary effects we retain the null hypothesis of complete crowding out in two of three pairwise comparisions but reject it in favour of incomplete crowding out in the comparison most closely akin to andreoni s design thus we confirm the existence of incomplete crowding out in some environments but suggest that the warm glow hypothesis is inadequate in explaining it

monopolistic competition growth and public good provision a normal good in this article i develop a model of public good provision in which private goods are supplied in a monopolistically competitive market in this context increases in the size of the group are increases in the population of a society i find that increases in population lead to reduced public good provision the reason is quite simple as population increases the number of private goods available for consumption also increases this raises the marginal utility of income and increases the opportunity cost of contributing to the public good while the level of voluntary contributions falls in this model the optimal level of provision is shown to increase with population thus there is a growing divergence between the optimal and equilibrium levels of provision of the public good in the standard model with a pure public good individual welfare rises with an increase in population both because of the increase in the level of provision of the public good and the reduced contribution per person that results from the population increase furthermore in the model of monopolistic competition without a public good welfare also increases with population due to the wider of variety of goods which are available in a larger economy however when the models are combined an increase in popu lation has an ambiguous effect on welfare this stems from the reduction in the level of provision of the public good as the population increases the model of monopolistic competition in this article is based on krugman 1980 this model assumes a simple form of increasing returns to scale under which each good may be produced by incurring a fixed set up cost plus a constant marginal cost of production when the population increases the economy can support a broader range of goods and this leads to a higher real income for individuals in the economy thus economic growth arising from a scale effect leads to reduced contributions to the public good in this model economic growth can also be caused by increases in total factor productivity in the model of monopolistic competition used here this would be reflected by reductions the fixed and marginal cost of production it turns out that reductions in these parameters also lead to reduced public good provision

optimal price subsidy policy for accelerating the diffusion of innovation due to the risk inherent in dependence on foreign oil there is a social benefit in aiding the introduction of alternative energy sources into the market place the federal government has initiated a number of programs including price subsidies to help accelerate the market diffusion of new alternative energy systems we develop a model to investigate analytically the effects of a price subsidy over time on the rate of market diffusion the model considers word of mouth effects and learning curve cost declines under a set of conditions that a new technology should be expected to meet before commercialization the optimal subsidy level is shown to be nonincreasing in time the related market price is shown to be closely related to the diffusion effect if there is no such effect the price to the customer is constant if there is positive diffusion effect price increases in time while if market saturation causes demand to decline over time price decreases in time

why do people give testing pure and impure altruism abstract researchers measure crowd out around one level of charity output to identify whether giving is motivated by altruism and or warm glow however crowd out depends on output implying first that the power to reject pure altruism varies and second that a single measurement of incomplete crowd out can be rationalized by many different preferences by instead measuring crowd out at different output levels we allow both for identification and for a novel and direct test of impure altruism using a new experimental design we present the first empirical evidence that consistent with impure altruism crowd out decreases with output jel d64 l31

public goods provision redistributive taxation and wealth accumulation this paper presents an extension of a static model of public goods provision with redistributional taxation as described by uler journal of public economics 93 3 4 pp 440 453 as a dynamic model of wealth accumulation intertemporal consumption and saving behavior strongly affect the relation between redistributive taxation and charitable contribution indeed the analyses presented herein reveal that more patience i e higher saving engenders a lower redistributional tax rate however the optimal redistributive tax rate is not zero because redistributive taxation improves the efficiency of providing public goods that are not improved by balanced growth this paper fills the gap separating static analysis and dynamic analysis and generalizes the results presented by static analysis

subscription equilibrium with production non neutrality and constrained suboptimality abstract we study a general equilibrium model with a non profit firm producing a public good using private goods as inputs which are financed by voluntary contributions subscriptions of households we analyze policy interventions that increase the public good level at subscription equilibria and show that some of the standard results of the neutrality literature do not survive in our model with many private goods and relative price effects allowed first we show that a redistribution away from a contributor or even a decrease in the total wealth of all contributors while the contributing set of agents remains intact can lead to an increase in the provided level of public good moreover we prove that increasing the production of public good is neither a sufficient nor a necessary condition to increase all households welfare finally we present conditions under which for a generic set of economies well chosen interventions will pareto improve upon a given subscription equilibrium outcome as a consequence a general non neutrality result in terms of utilities holds even if all households are contributors

strategic transfers and private provision of public goods abstract this paper considers strategic monetary transfers between two agents when these contribute to a mutual public good if the agents differ in their contribution productivity then the less productive agent has an incentive to make large unconditional transfers to the more productive agent although agents move simultaneously in each stage of the game the less productive agent becomes a stackelberg leader furthermore the generic subgame perfect equilibrium is characterized by full specialization

can private giving promote economic segregation this paper explores the theoretical relationship between tax relief for private giving and individual location choice tax relief for giving may receive political support at the local level because of its distributional effects however through its effects on public provision choices such relief may affect individual location decisions and in so doing has an impact on the jurisdictional configurations that can arise in equilibrium for some demographic parameters it will promote economic segregation rather than integration while for others the opposite is true in the former scenario a ban on local tax incentives for giving would be pareto improving and would thus be sanctioned by a majority supported federal tax constitution

a theory of impact philanthropy this article develops a new model of altruism called impact philanthropy an impact philanthropist is someone who wants to personally make a difference while that motive is straightforward its logical implications are significantly different from other models of philanthropy for example the contributions of other donors can reduce an impact philanthropist s charitable fulfillment as a result cooperation among impact philanthropists can reduce aggregate giving in addition impact philanthropy can lead to a codependent relationship between givers and receivers in which both benefit from the other finally the model suggests a conflict between charitable organizations and its donors concerning the allocation of charitable gifts in particular a charitable organization prefers to spread a donor s contribution across many goods whereas a donor prefers to target his or her contribution at a specific good d 2003 elsevier b v all rights reserved

crowd out and diversity abstract research has shown that altruism is lower in diverse communities can this phenomenon be counteracted by government intervention to answer this question this paper introduces diversity to the canonical model of warm glow giving diversity may have two effects on incentives it may attenuate individuals altruistic preferences for public goods and it may cool off the warm glow that individuals get from voluntarism either of these effects leads to diverse communities having lower levels of public goods consistent with prior research however these effects have opposite implications for the efficacy of government intervention i then empirically investigate whether government intervention is more effective in diverse communities for identification i exploit the supreme court mandated 1991 expansion of the ssi program using a new dataset of united methodist churches from 1984 to 2000 the results show that the expansion of ssi crowded out charitable spending by churches the crowd out estimate for the average church is reasonably large but this masks significant differences in crowd out between communities crowd out occurred almost entirely in relatively homogeneous communities there is only modest evidence of crowd out in racially diverse communities thus diverse communities while having the lowest levels of altruism are in this instance the most amenable to government intervention

philanthropic motives and contribution policy this paper discusses different forms of transfer from a group of rich individuals to a group of poor individuals this transfer is based on the philanthropic motive of the donor who is not indifferent to the use of his contribution in particular the poor individual s vector of consumption is entered as a part in the donor s utility function

voluntary contributions and local public goods in a federation abstract this paper considers nonneutral effects of government spending in a federation of multiple jurisdictions both government spending and private donations finance local public goods redistributive programs that provide transfers for the poor in the standard model government spending has no effect on the public goods as donors reduce their donations one for one in response to an increase in government spending in a federation donors of a jurisdiction donate through federal charities to help the poor in the jurisdiction and the poor in other jurisdictions as well jurisdictions are thus linked through donations such linkage influences donors behavior beyond the traditional crowding out effect as a result government spending has nonneutral effects on the level of public goods

a theory of distributional conflict voluntarism and segregation along with the rise in income inequality in the us there is evidence of a simultaneous move towards fiscal devolution and increased government reliance on private provision of public goods this article argues that these phenomena are related we describe a model of jurisdiction and policy formation in which the structure of government provision is endogenous and public good provision levels are determined by a political process that can exploit private motives for voluntary giving the model predicts that an increase in income inequality leads to decentralisation with local jurisdictions becoming more income homogeneous than the population as a whole this reduction in local income heterogeneity combined with a reduced tax base results in increased reliance by government on private provision

public good provision in indian rural areas the returns to collective action by microfinance groups self help groups shgs are the most common form of microfinance in india the authors provide evidence that shgs composed of women only undertake collective actions for the provision of public goods within village communities using a theoretical model this paper shows that an elected official whose aim is to maximize re election chances exerts higher effort in providing public goods when private citizens undertake collective action and coordinate their voluntary contributions towards the same goods this effect occurs although government and private contributions are assumed to be substitutes in the technology of providing public goods using first hand data on shgs in india the paper tests the prediction of the model and shows that in response to collective action by shgs local authorities tackle a larger variety of public issues and are more likely to tackle issues of interest to shgs the findings highlight how the social behavior of shgs can influence the governance of rural indian communities

price subsidies and guaranteed buys of a new technology abstract we consider a problem of a government that wishes to stimulate the adoption of a new technology in order to replace an older environmentally less desirable technology the new technology is manufactured by a monopolist firm which has learning by doing in its production process the firm sells the new product to both private households and government institutions and wishes to determine an optimal pricing policy the government has at its disposal two instruments subsidizing the consumer price and making purchases of the new technology from the firm we assume profit maximization on the part of the firm the government wishes to maximize the cumulative number of units of the new technology sold to private households by the terminal date of the government program the problem is set up as a stackelberg differential game in which we identify an open loop equilibrium supposing that the government can credibly precommit to its subsidy and buying program

why are tax expenditures for giving embodied in fiscal constitutions abstract this paper asks whether there can be unanimous support for a fiscal constitution that includes tax expenditures for giving among the set of available fiscal instruments we describe a political economy model of fiscal choices where individuals with different incomes vote over levels of proportional income taxation and over tax incentives for giving and investigate how the availability of such incentives affects political equilibrium outcomes and welfare for different income groups we find that unanimous support for the use of tax incentives for giving can indeed arise and is more likely the more unequal is the distribution of income

tax transfer policies and the voluntary provision of public goods abstract the purpose of this paper is twofold first it extends previous models of non cooperative private funding of pure public goods by allowing both for distortionary taxation of private goods and for subsidies based on contributions to the public goods second it clarifies the type of behavioral and informational assumptions which are needed to insure neutrality of both lump sum and distortionary policies the analysis is developed in the context of fiscal federalism

information asymmetry and equilibrium monitoring in education abstract we develop a theoretical and computational model of school choice and achievement that embeds information asymmetries in the provision of education because school effort is unobservable to households and policymakers schools have an incentive to under provide effort this moral hazard affects both public and private schools although public schools are subject to an additional distortion because of limited competition and fixed funding household monitoring of schools can mitigate moral hazard but some households may free ride on the monitoring of others using our calibrated model we simulate two policies aimed at raising achievement public monitoring of public schools and private school vouchers our results indicate that in large scale settings no single tool may suffice the reason is twofold a no tool raises achievement or welfare for all households and b since the extent of moral hazard is endogenous the application of each tool has unintended consequences that limit its own effectiveness results also indicate that setting the policy parameters for public schools at the levels preferred by the majority of households may mitigate the distortions nonetheless the current actual values of these parameters seem to match more closely the preferences of public schools than the preferences of parents

private versus public charity reassessing crowding out from the supply side this paper tests a model where governmentand private charity are perfect substitutesin consumption but the cost of providingcharitable assistance differs betweenprivate and government suppliers theanalysis demonstrates that higher costs oftransferring through the government canaccount for the observed phenomenon of lessthan complete crowding out and theempirical results are broadly consistentwith that approach overall the evidenceis consistent with the hypothesis thatindividuals both care about the leakagesinvolved in transferring funds to the poorthrough government and respond in theirprivate giving to changes in thedifferential public cost

technical note a note on optimal strategic pricing of technological innovations the experience curve phenomenon of falling marginal costs associated with accumulated output or production experience has given rise to dynamic pricing models optimal pricing policies will depend upon the nature of the dynamic demand and cost functions in this note we shall show that the demand function employed by bass bass f m 1980 the relationship between diffusion rates experience curves and demand elasticities for consumer durable technological innovations j bus 53 july s51 s67 when taken in conjunction with the experience curve cost function leads to a multiperiod pricing strategy which is always less than the myopically optimal price further we present a dynamic programming algorithm for the multiperiod strategy in which we have explored the effects on discounted profits of myopic pricing versus multiperiod pricing the results of this comparison may to some be somewhat surprising and may have managerial significance

mandatory minimum contributions heterogeneous endowments and voluntary public good provision abstract in a public good experiment with heterogeneous endowments we investigate if and how the contribution level as well as the previously observed fair share rule of equal contributions relative to one s endowment hofmeyr et al 2007 keser et al 2014 are influenced by minimum contribution requirements we consider three different schedules fixmin requiring the same absolute contributions relmin requiring the same relative contributions and progmin requiring minimum contributions that progressively increase with the endowment we find that minimum contributions exert norm giving character and may lead to an increase in average group contributions this is especially true for the progressive schedule on the individual level this schedule leads to higher relative contributions by the wealthier players and thus violates the fair share norm on the group level it leads to the highest contribution level and the lowest inequality in total profits as measured by the gini index

ideals versus dollars donors charity managers and government grants this paper demonstrates how changes in untied lump sum government grants or income from unrestricted endowments will affect the behavior of charities operated by managers with strong philosophical or professional commitments an increase in such funds will reduce the charity s accountability to private donors and lower its fund raising activities the grant will not be spent entirely on raising the quantity of output instead it will permit the charity manager to reduce his or her dependence on the costly solicitation of donors who do not completely share the manager s preferences in order to understand nonprofit charities one must recognize both their diversity and the independent role of their managers in furthering this diversity we will miss much of their special character if we view them as mere conduits seeking faithfully to reify the wishes of their contributors in this paper i demonstrate how an increase or a fall in untied lump sum government grants or income from unrestricted endowments will affect the behavior of charities operated by managers with strong philosophical or professional commitments to some service mixes rather than others an increase in such funds will reduce the charity s accountability to private donors and lower its fund raising activities the grant will not be spent entirely on raising

do hypothetical and actual marginal willingness to pay differ in choice experiments application to the valuation of the environment abstract in this paper we test the validity of choice experiments with donations for environmental projects in particular we test whether or not there are differences in preferences between a hypothetical and an actual choice experiment our experiments indicate no differences in addition internal tests of validity indicate transitive and stable preferences in both experiments although there are some indications of possible learning effects during the experiment

pure public goods and income redistribution in a federation with decentralized leadership and imperfect labor mobility abstract we examine the non cooperative provision of a pure public good by regional governments in a federation similar to the european union where regional governments are stackelberg leaders and the central government is a stackelberg follower a federation with decentralized leadership the center makes interregional income transfers after it observes the contributions to the pure public good imperfectly mobile workers react to regional and central governments policies by establishing residence in their most preferred region despite the degree of labor mobility we show that the pure public good and interregional transfers are generally allocated efficiently in a federation with decentralized leadership

the private provision of public goods altruism and voluntary giving abstract a unique data set on exact giving by individual households for the support of a rural health care facility is used to examine the determinants of charitable giving including the role of altruism we examine whether a household s decision to give or not give and the amount it gives are influenced in the same or different ways by the household s characteristics and economic circumstances we also examine whether a household s altruistic history affects its current giving decisions

estimating willingness to pay do health and environmental researchers have different methodological standards health and environmental economists have been employing stated preference sp methods such as conjoint analysis or contingent valuation to estimate the monetary value of public health interventions and environmental goods and services however the quality of data and the validity of results are sensitive to a number of decisions researchers make the aim of this study is to compare the degree of the current consensus among active researchers in the rapidly evolving area of sp methods in health and environmental valuation we surveyed researchers who have published manuscripts on sp methods in the last 10 years researchers were presented with hypothetical sp studies with different attributes they were first asked which study they would recommend to use to inform policy decisions and then asked which study has better quality our results show that good practice sp methods vary among study features and among researchers with different amounts and kinds of research experience although health researchers

media coverage and charitable giving after the 2004 tsunami author affiliation philip h brown department of economics colby college 5246 mayflower hill waterville me 04901 usa e mail phbrown colby edu corresponding author jessica h minty analysis group inc 111 huntington avenue 10th floor boston ma 02199 usa e mail jminty analysisgroup com acknowledgment we are grateful to claudio agostini michael donihue martin farnham rebecca graninger daniel hamermesh melanie siben tom tietenberg andreas waldkirch seminar participants at colby college and two anonymous referees for numerous helpful comments and suggestions we would also like to acknowledge reuters alertnet and chuck lakin for their assistance in identifying data sources and care usa catholic relief services mercy corps surfaid international and four other relief agencies for providing data for the purpose of this research finally philip h brown would like to thank the international food policy research institute for sabbatical support during the preparation of this manuscript 1 introductionrelief workers have long believed in the causal relationship between media coverage of humanitarian crises and charitable giving to relief agencies for example private donations to relief agencies during the early stages of the 1994 rwandan genocide were sufficient to support approximately one million displaced rwandans but after the tribulations of o j simpson and tanya harding eclipsed rwanda in the media funding for relief activities began to decline the perception among many aid workers in the camps for rwandan refugees including one of the authors was that the media had turned its back on the crisis with potentially dire consequences 1while anecdotal evidence abounds few studies have systematically assessed the relationship between media coverage and the behavior of private donors and those that do suffer from important analytical shortcomings for example an analysis undertaken by the institute for philanthropy finds that 14 of 15 surveyed british philanthropists believe that the media has the power to encourage private giving with 11 of the 15 being inspired to make charitable donations themselves breeze 2005 similarly olsen carstenson and hoyen 2003 find a high correlation between the total number of relevant articles in western newspapers and the total amount of humanitarian assistance allocated to victims of the flooding in mozambique in 2000 and the cyclone in eastern india in 1999 unfortunately neither sample is large enough to make generalizations nor is there any attempt to quantify the magnitude of the causal relationship in part the difficulty in quantifying the relationship stems from disentangling the effect of new developments in stories covered in the media from the pure effect of media coverage returning to the rwanda case the former is tantamount to asking what is the combined effect of 10 000 additional deaths and a five minute news story on donations to u s charities while the latter is equivalent to asking given that 10 000 people were killed what is the effect of increasing the news story from five minutes to six in this paper we use the december 26 2004 tsunami as a case study to quantify the causal effect of media coverage on donations to charity specifically we consider the effects of reporting on three nightly network news broadcasts and articles in two prominent newspapers on private donations to seven u s relief agencies to eliminate the time lag between when news reports are seen or read and when donations are received by relief agencies we focus exclusively on donations made via the internet we also control for donor fatigue tax incentives and weekends to better isolate the effect of media coverage finally to alleviate simultaneity concerns and omitted variable bias including new developments in the tsunami story itself we use announcements of casualties among u

modeling charitable contributions of time and money abstract public goods theory predicts that government spending on charity can perfectly crowd out charitable contributions empirical research has found little support for the perfect crowd out hypothesis however the empirical work only measures part of a contributor s total contribution gifts of money contributors also volunteer labor this article extends the public goods model to the case in which individuals contribute both time and money to a charity that in turn produces a public good the model suggests that charitable contributions of time and money are perfectly substitutable in equilibrium this result offers new interpretations for existing empirical observations and suggests a new test of the crowd out hypothesis the implications of the model are empirically tested using a national survey of charitable activity

referendum design and contingent valuation the noaa panel s no vote recommendation this paper considers the effects for offering a would not vote option in contingent valuation cv questions framed using the referendum format this approach arises from a suggestion made by the national oceanic and atmospheric administration s noaa panel on contingent valuation the noaa panel was asked to evaluate the use of this method for estimating the economic value of nonmarketed environmental resources in the context of natural resource damage assessments this test used the cv questionnaire developed for the study of the exxon valdez oil spill conducted by the state of alaska with in person interviews the findings suggest that when those selecting the would not vote response are treated as having voted against the program a conservative coding offering this option does not alter 1 the distribution of for and against responses 2 the estimates of willingness to pay derived from these choices or 3 the construct validity of the results

the robustness of kingma s crowd out estimate evidence from new data on contributions to public radio we revisit kingma s kingma 1989 journal of political economy 97 1197 1207 widely cited study of charitable contributions to public radio kingma s estimate of partial but statistically significant crowd out remains a benchmark in the literature because he was able to match household level contributions data with station level data on revenue including revenue from government grants to the best of our knowledge no comparable data have become available until now we replicate kingma s estimates with the original data and then apply the same methodology to very similar data from 1996 kingma s estimates are not robust to the use of the newer data

voluntary donations and public expenditures in a federal system proponents of the new federalism argue that nonprofit organizations and local governments will fully offset federal social service expenditure cutbacks the author analyzes this proposition as a competitive game in which donations are motivated by private and public good considerations the author characterizes the response of political economic equilibrium to exogenous changes in federal expenditures when local voters are cognizant of donor reactions partial replacement is the most likely outcome though others are possible copyright 1987 by american economic association

optimal tax treatment of private contributions for public goods with and without warm glow preferences abstract tax favored contributions for financing some public goods may be a useful part of optimal nonlinear income tax and expenditure policy there are two sides to the potential gain from subsidized donations first for a given level of public good provision higher private donations from high earners than low earners eases the incentive compatibility constraint for donors and so can raise social welfare this follows since considering a lower paid job includes a perception of a drop in public good provision second private donation reduces consumption easing the resource constraint this paper explores optimal policy using first a model with standard preferences and then a model with a warm glow of giving in addition to showing the conditions for the level of public goods the paper considers the pattern of optimal subsidization across earnings levels analysis of optimal taxation with warm glow preferences is sensitive to the choice of preferences that are relevant for a social welfare evaluation after considering optimal rules with formulations of social welfare which do and do not include warm glow utility the paper considers the choice of normative criterion like the earlier literature this paper assumes that organizing private donations is costless while tax collection has a deadweight burden since private charitable fundraising is very far from costless the paper is an exploration of economic mechanisms not a direct guide to policy

volunteer labor supply abstract we model the supply of volunteer labor which received an explicit wage of zero quantitatively important it constituted over 5 percent of the entire labor supply in the united states in 1980 both consumption and investment models are considered the former positing volunteering as an ordinary consumer good while the latter posits it as a means of obtaining on the job experience empirical estimation based on survey data discloses statistically significant effects of price and income variables on the supply of volunteer labor

pareto optimal redistribution comment occurs in the context of the hochmanrodgers scheme is a function of a people s rate of substitution between the satisfaction derived from retaining income and that derived from giving it and b the initial distribution of earnings which exists before giving occurs whatever the values of a the outcome will differ depending on b such at least will be the case unless everybody s rate of substitution is such that complete equality results pareto optimal redistribution thus constitutes a secondary redistribution which depends on the initial distribu

interior matching equilibria in a public good economy an aggregative game approach abstract if the equilibrium generated by a matching mechanism is to be the desired pareto optimal outcome it is necessary for every player to be at an interior solution at that equilibrium using the aggregative game approach developed by cornes and hartley 2003 2007 this paper analyzes the conditions under which matching mechanisms in a public good economy lead to interior matching equilibria at which all agents make strictly positive flat contributions to the public good in particular we show that the distribution of income among the agents is crucial for both the existence of interior matching equilibria and warr neutrality in the case of matching

the intergenerational transmission of generosity abstract this paper estimates the correlation between the generosity of parents and the generosity of their adult children using regression models of adult children s charitable giving new charitable giving data are collected in the panel study of income dynamics and used to estimate the regression models the regression models are estimated using a wide variety of techniques and specification tests and the strength of the intergenerational giving correlations is compared with intergenerational correlations in income wealth and consumption expenditure from the same sample using the same set of controls we find the religious giving of parents and children to be strongly correlated as strongly correlated as are their income and wealth the correlation in the secular giving e g giving to the united way educational institutions for poverty relief of parents and children is smaller similar in magnitude to the intergenerational correlation in consumption parents religious giving is positively associated with children s secular giving but in a more limited sense overall the results are consistent with generosity emerging at least in part from the influence of parental charitable behavior in contrast to intergenerational models in which parental generosity towards their children can undo government transfer policy ricardian equivalence these results suggest that parental generosity towards charitable organizations might reinforce government policies such as tax incentives aimed at encouraging voluntary transfers

do government subsidies increase the private supply of public goods we study three different models in which public goods are supplied by private contributions in one of these models tax financed government subsidies to private contributions will definitely increase the equilibrium supply of public goods in the other two models government subsidies are neutralized by offsetting changes in private contributions we explain why it is that these models lead to opposite conclusions and we argue on the basis of our first model that a government that wants to use taxes and subsidies to increase total provision of public goods will be able to do so indeed our model yields a surprisingly decisive comparative statics result if public goods and private goods are both normal goods then an increase in the subsidy rate will necessarily increase the equilibrium supply of public goods

are preferences stable the case of health care abstract experiments concerned with modelling individual preferences are based on the assumption of stability of preferences violations of the stability assumption have implications for the increasing amount of experimental work in health care concerned with the welfare implications of alternative policies this paper reports the results of a discrete choice experiment dce carried out to examine the effect of experience on stability of preferences within health care whilst the results provide evidence of stability further research is required before these results are generalised

optimal pricing strategies for new products in dynamic oligopolies this paper deals with the determination of optimal pricing policies for firms in oligopolistic markets the problem is studied as a differential game and optimal pricing policies are established as nash open loop controls cost learning effects are assumed such that unit costs are decreasing with cumulative output discounting of future profits is also taken into consideration initially the problem is addressed in a general framework and we proceed to study some specific cases that are related to models presented in recent literature three basic classes of sales dynamics are analyzed competition with price effects only competition with price as well as adoption effects and competition with adoption effects only in some cases it turns out that results which hold for the monopoly case carry over to the multi firm case in the sense that the qualitative structure of optimal pricing strategies is the same in the monopoly and the oligopoly cases however due to competitive interdependencies differences certainly exist in the levels as well as the rates of change of optimal prices

an experimental test of warm glow giving abstract this paper reports the results of an experimental test of the warm glow hypothesis a participant is presented with the opportunity to contribute from her own endowment to a charity of choice the experiment is designed so that a pure altruist has no incentive to donate the amount the designated charity will receive is preset any contribution by the participant crowds out dollar for dollar giving by the proctor we find that participants on average donated 20 of their endowments and that approximately 57 of the participants made a donation

quick and dirty numbers the reliability of a stated preference technique for the measurement of preferences for resource allocation we investigated the reliability of an internet based stated preference survey to elicit preferences for priority setting using a conjoint study like approach preferences were elicited among members of an internet survey panel in an experimental allocation of points task at two times the main finding is that the survey showed good reliability and most participants consistently adjusted their allocations of points to differences in presented scenarios at the repetition of the survey respondents were more likely to prioritize between new treatment programs competing for funding and those that did prioritize discriminated stronger between programs we found no evidence that respondents were making easy choices or arbitrarily clicked through the survey

financing public goods public goods can be financed by direct taxation or a subsidy to private spending this paper examines the relative efficiency and distributional consequences of the two methods efficiency is shown to depend on the price elasticity of private spending and the trade off between public and private spending when this trade off is dollar for dollar however a subsidy is always more efficient than direct taxation the gains from a subsidy are larger for a mixed good than for a pure public good looking a t distributional effects the author shows when richer taxpayers may prefer a tax credit to deductibility even though they face lower prices with deductibility and also shows when richer taxpayers prefer direct taxation to either type of subsidy copyright 1987 by university of chicago press

do immigrants and their children free ride more than natives the main goal of this paper is to analyze the differences between immigrant and native households in their volunteer contributions and private transfer behavior as well as their receipt of assistance from nongovernment sources in addition we examine how the immigrant native differences evolve over time as immigrant households accumulate us experience finally we examine the voluntary contribution behavior of second generation immigrants and children in immigrant households to gain insight into the long term impact of immigration we do not find evidence that immigrant households free ride more than native born households first immigrant households when compared to similar native born households are less likely to receive assistance from nongovernment sources second immigrant status has no statistically significant impact on monetary contributions toward public good provision we also find that the immigrant native differences in monetary and time contributions tend to diminish over time as immigrants acquire us experience finally we find no significant differences between the second generation of immigrants and third or higher generations of americans in their voluntary contributions of money and time we obtain similar results for children in immigrant households they are not significantly different from children in native households in their time contribution and in their enrollment in federal meal programs the results are robust to various income and wealth controls do immigrants and their children free ride more than natives

do public grants to american theatres crowd out private donations this paper examines the relationship between public support and private donations by disaggregating the crowding effect into two components one determined by level of public support and one determined by changes in public support levels the analysis of a panel of american non profit theatres shows that the crowding effect induced by the level of public support takes an inverted u shape at low levels public support crowds in private donations while at higher levels it displaces them the change in total public support in the past year produces a constant crowding in effect on the level of private donations the paper finally illustrates how federal and state support have a crowding in effect at all levels while local support has a similar impact to total public support

voluntary income redistribution with migration abstract this paper examines theoretically the welfare magnet problem brought about by income redistribution in a small area where disparities across jurisdictions in transfer policies may induce both recipient and resource migration we show that the level of redistribution determined by majority rule may either rise or decline as household mobility increases and that this level will be either higher or lower than the efficient level to an extent that depends on local market conditions the social value of migrants and the mobility of both the rich and the poor in particular an economy may benefit from the immigration of transfer recipients we also derive the form of an efficient community specific subsidy to transfers which in some cases will be negative

valuing morbidity an integration of the willingness to pay and health status index literatures placing dollar values on human health has long been a controversial aspect of policy analysis and remains difficult given the relatively small number of morbidity valuation studies available by combining both the economic and health literature this paper offers an alternative approach to morbidity valuation and provides estimates for a wide range of short term health conditions

strategic information acquisition and the mitigation of global warming abstract we consider the strategic role of uncertainty and information acquisition for the mitigation of global warming before the countries decide on their contribution to a mitigation of global warming they may invest in information about the country specific benefit of reductions of the emissions of greenhouse gases we show that information acquisition has a substantial strategic value countries may prefer not to learn their benefit of climate protection even if information acquisition does not involve a direct cost this strategic information choice may further decrease the efficiency of the public good provision

non cooperative public good provision and productivity differentials we explore the generality of a rotten spouse theorem in konrad and lommerud 1995 while the result holds for an arbitrary number of agents it fails to hold for general technologies some of the implications for models of co emissions are discussed

public goods hidden income and tax evasion some nonstandard results from the warm glow model abstract a large literature explores crowd out in situations where public goods are jointly provided work in this area typically depicts a tax system where individuals take taxes as given but in some settings such as those in developing economies efforts to evade or avoid taxes may be widespread using the canonical warm glow model this paper considers joint public good provision in a setting where individuals can evade taxes by hiding their income the model s implications change significantly in this setting with hidden income stronger warm glow will lead to greater crowd out not less using research on crowd out and inter family transfers i present suggestive evidence that the model s results may help to reconcile divergent estimates of crowd out in the literature

a signaling explanation for charity this article examines a novel but plausible motive for charitable giving charitable donations which are observable can signal wealth or income the signaling equilibrium of charitable donations has attractive properties donations increase proportionally with population size governmental funding for public goods affects private charity only through an income effect crowding out need not be complete income redistribution is generically nonneutral increasing the spread between the poorest and richest person in a community tends to increase private donations our theory are based on the assumption that people are willing to make charitable donations even if they will not increase provision of the public good the data on charitable giving support the hypothesis that donors donate at least partly for signaling purposes rather than only to aid the recipient or to obtain satisfactions unrelated to status though charitable organizations usually report donations within categories thus not allowing perfect revelation for analytical tractability we shall consider an equilibrium with perfect revelation and a continuum of types as characterized in george j mailath 1987 and norman j ireland 1994

an empirical test of neutrality and the crowding out hypothesis this paper tests warr s neutrality hypothesis that the voluntary provision of a public good is independent of the distribution of income specifically i test the null hypothesis of neutrality against the alternative that total contributions to a public good will be larger the less equally income is distributed to test this hypothesis a new data set is constructed by merging data on total voluntary contributions to individual public radio stations with 1990 census data on the income distribution in each station s listening area i find that voluntary contributions increase as income inequality rises

the tullock bastiat hypothesis inequality transfer curve and the natural distribution of income conventional wisdom has long held that public policy has worked to reduce income inequality in contemporary america or that at least it has the real capability of achieving that goal thurow 1971 for example the evidence is strong that there was a pronounced decline in measured inequality during the 1930s and 1940s a period of greatly increased governmental intervention on both the tax and expenditure side designed to reduce inequality lindert and williamson 1980 increased government expenditures went or so it was argued largely to alleviate the plight of the poor and thus greater federal public aid expenditures brought about greater equality similarly it commonly has been maintained that higher and more progressive federal taxes serve to further reduce inequality in america there is another view however which holds that governmental intervention in markets may have a different impact while he believes the modern welfare state has clearly reduced incomes for the extremely wealthy tullock 1983 has suggested that many government transfers are not transfers from higher to lower income groups but rather transfers within the middle class allowing at least the possibility that governmental transfer activity might not in the aggregate increase income equality in any significant manner perhaps the citizenry are interested in promoting income equality but only to some limited extent in that regard evidence compiled by lebergott 1975 is interesting since the midnineteenth century there has been a remarkable rough constancy in government payment levels to the poor relative to wage levels of common laborers to be sure there have been some periods of increased support for the poor such as during the heyday of the war on poverty in the late 1960s but as tullock has expressed in private correspondence with us the body politic has spasms of feeling more than usually charitable and then goes back to normal the conventional wisdom had previously been questioned by reynolds and smolensky 1977 and for that matter by bastiat 1848 1964 who said that the state produces more poverty than it cures along similar lines lebergott 1975 15 speaking of poor elderly americans observed they are not impoverished in spite of the american capitalist welfare state they are in poverty because of it

the isolation paradox and the discount rate for benefit cost analysis one argument used to justify a rate of discount for benefit cost analysis below the market rate is based on a divergence of private and collective behavior known as the isolation paradox in this paper we reexamine this argument using a three period general equilibrium model incorporating the intergenerational structure of benevolence assumed by earlier writers we show that in this model the appropriate rate of discount is the market rate regardless of the existence of the isolation paradox in the absence of other market distortions no shadow pricing of capital inputs is necessary in the calculation of net present value

altruism voluntary contributions and neutrality the case of environmental quality this paper develops an intertemporal model wherein production generates pollution which is viewed by consumers as a public bad there are two types of consumer those who are altruistic and leave bequests to their children and those who are pure life cyclers both types voluntarily contribute to the quality of environment through environmental groups it appears that if bequests by altruists and voluntary contributions by all are positive redistribution is neutral which does not mean that pollution abatement and capital accumulation are optimal to achieve optimality one needs a tax on inheritance and a differential subsidy on all consumer contributions

sub optimal saving and the shadow price of labor the public good argument abstract one argument for the incorporation of a premium on saving into calculations of the shadow price of labor has been the claim that aggregate inter generational savings are a public good and the individual savings decisions lead to sub optimal provision of savings this paper shows that even if this claim was true the incorporation of a premium on savings into benefit cost analysis calculations would be inappropriate the shadow price of labor relative to project output shoud still be set at the relative effects on aggregate income of hiring a worker on the one hand and producing output on the other

the relative efficiency of private and public transfers this paper develops a model for comparing the relative efficiency of private versus public financing of transfers a distinctive feature of the analysis is explicit recognition of important weaknesses and strengths of each form of financing a collective consumption good our results show that the preferred financing method is ultimately an empirical issue with the answer depending critically on donor motives and the government s ability to correctly ascertain donors tastes

additionality and reverse crowding out for pollution offsets in water quality trading market based environmental policies frequently include offset provisions that allow polluters who are not subject to a binding cap to participate in trading programs when offsets are used for compliance it is important that they are additional in the sense that the payment from the trading program induces environmental benefits that would not occur without the program in this paper we analyze a water quality trading program in ohio u s to estimate the extent to which the offsets are additional using data from the program and a farmer survey we estimate the number of additional conservation practices that are adopted by farmers who participated in the trading program relative to the counterfactual outcome without the program using matching methods we find no statistically significant increase in the number of conservation practices due to the trading program we also examine whether the trading program may have crowded out government funding we also do not find significant evidence for such crowding out instead finding some evidence that the trading program may have led to greater participation in federal cost share programs

the strategic advantage of being poor private and public provision of public goods when people know that a public good is to be privately provided in the future economic behaviour may change in periods before the one with the private provision game individuals have a distortionary incentive to reduce their disposable income so as to shift the burden of provision to others the incentive is eliminated if the government provides a sufficient amount of the public good in a second best world private provision of public goods has been claimed to be a reasonably good alternative to public provision this claim needs to be reconsidered in the light of these results

do conservation auctions crowd out voluntary environmentally friendly activities research has shown that introducing external incentives to encourage pro social behavior such as monetary rewards or regulation may crowd out voluntary pro social activity this has implications for the appropriate design and use of such incentive based programs this study investigates motivational crowding out in the case of conservation auctions a relatively new tool that provides monetary incentives to encourage landowners to adopt environmentally friendly management practices our experimental evidence shows that the introduction and subsequent removal of a conservation auction significantly reduces voluntary provision of environmental quality via monetary donations to an environmental charity compared to a control group that does not experience an auction we also attempt to examine some economic theories of behavior that explain this effect according to either individual motivations or social interactions and our initial exploration finds that crowding out occurs regardless of whether or not participants have opportunities to interact with one another during the experiment

family policy with non cooperative families we consider a non cooperative model of a family s time allocation between market work and providing a home produced family public good such as child care or care for the elderly the model predicts underprovision of the public good because of crowding out this does not necessarily warrant public provision in contrast to other approaches in family economics we find that attempts to redistribute between spouses may alter the final distribution within the marriage and that such a policy may be pareto improving we also find that some degree of progressivity of the income tax can be welfare improving

pareto optimal redistribution and private charity abstract when private charity exists and is motivated by utility interdependence a non pareto optimal outcome the free rider problem typically arises nevertheless incremental fiscal redistribution cannot achieve a paretian welfare improvement so long as private charity continues at positive levels donors respond to incremental fiscal redistribution by reducing their voluntary contributions by exactly a dollar for every dollar transferred in this way no net transfer is achieved unless incremental fiscal redistribution is pursued to the point where private contributions have been driven to zero alternatively a net transfer may be achieved by fiscal measures which affect donors marginal incentives to donate

on the efficiency of a global market for carbon dioxide emission permits type of externality and timing of policymaking we demonstrate that global permit markets are pareto efficient despite the externality type production or consumption when income redistribution occurs after regional environmental policymaking ex ante income redistribution is neutral if emissions affect production only but non neutral if emissions affect consumption 2008 elsevier b v all rights reserved

monopolist pricing with dynamic demand and production cost this paper deals with pricing of a new product over time by a monopolist who maximizes the discounted profit stream the interdependency of cost and demand on cumulative production makes the problem inherently dynamic cost is assumed to be declining with cumulative production learning curve effect while demand is a function of price and cumulative sales representing word of mouth and saturation effects the paper addresses this problem in a general framework that includes several previous results as special cases and provides new insights in other situations while the learning curve and word of mouth effect cause prices to be lower than the price that maximizes immediate revenues the saturation factor has the opposite effect the price path over time is affected by these factors and the interest rate we characterize the price path under several different situations and interpret the results for policy guidelines