Open AccessPeer Effects in Charitable Giving: Evidence from the (Running) Field
Author(s) -
Smith Sarah,
Windmeijer Frank,
Wright Edmund
Publication year - 2015
Publication title -
the economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.683
H-Index - 160
eISSN - 1468-0297
pISSN - 0013-0133
DOI - 10.1111/ecoj.12114
Subject(s) - peer effects , quality (philosophy) , set (abstract data type) , economics , social psychology , public economics , psychology , computer science , philosophy , epistemology , programming language
There is a widespread belief that peer effects are important in charitable giving but little evidence on how donors respond to their peers. Analysing a unique data set of donations to online fund‐raising pages, we find positive and sizeable peer effects: a £10 increase in the mean of past donations increases giving by £2.50, on average. Donations respond to both very large and very small amounts and to changes in the mode. We find little evidence that donations signal charity quality – our preferred explanation is that donors use information on earlier donations to decide what is appropriate for them to give.