Premium
ROUND GIVING: A FIELD EXPERIMENT ON SUGGESTED DONATION AMOUNTS IN PUBLIC‐TELEVISION FUNDRAISING
Author(s) -
Reiley David,
Samek Anya
Publication year - 2019
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12742
Subject(s) - donation , set (abstract data type) , field experiment , string (physics) , economics , field (mathematics) , ask price , marketing , microeconomics , advertising , business , statistics , mathematics , computer science , finance , mathematical physics , programming language , economic growth , pure mathematics
Direct‐mail fundraisers commonly provide a set of suggested donation amounts to potential donors, in addition to a write‐in option. Standard economic models of charitable fundraising do not predict an impact of suggested amounts on charitable giving. However, our field experiments on direct‐mail solicitations to over 10,000 members of a public television station tell a different story. We find that changing one of the suggested amounts in an ask string from $100 to $95 reduces the number of gifts greater than or equal to $90 by more than 30%. This contrasts with our finding that in three independent comparisons, increasing the entire vector of suggested amounts by 20%–40% reduces the probability of giving by approximately 15%, with little effect on the average size of the gift. Both manipulations lead to a larger proportion of write‐in donations, even as they reduce the number of total gifts. We propose a simple behavioral theory to explain the data: many donors prefer to give round numbers, and donors incur a cognitive cost when choosing to give a nonsuggested amount. ( JEL C9, H4)