The price elasticity of charitable giving: New experimental evidence

We examine the charitable giving decisions of donors under two subsidy mechanisms, rebate and matching, and we calculate the price elasticity of giving. We implement an online survey using the Amazon Mechanical Turk platform. Participants are asked to make a series of allocation decisions between themselves and a charity of their choice. We vary endowment and subsidy rates in line with the literature. The results show that contributions under matching subsidies are significantly higher than contributions under rebate subsidies. Participants who usually make a donation are more likely to give and are less responsive to price changes. Moreover, the probability of giving increases monotonically along with subsidy rates.