1 When and Why Matches Are More Effective Subsidies Than Rebates Evidence From a Field Experiment with Health Charities in the Netherlands René Bekkers ICS/Department of Sociology, Utrecht University, the Netherlands

2 A Survey Experiment Respondents in ‘Giving in the Netherlands Panel Survey’, Wave 2, 2004 (n=1030) Dictator game with charities as recipients Pps play with earnings for participation in survey, depending on q. time (avg. €11, $13) Are matches more effective than rebates? Why and when are matches more effective? For whom are matches more effective?

3 The Framing Hypothesis Matches are more effective than rebates because they generate a cooperative frame (Eckel & Grossman, 2003) A third party providing a matching donation is more visibly ‘joining in’ Expectations about others’ generosity are important in ambiguous situations Donors will expect more others to join in on a match than on a rebate Expectations should mediate match-effect

4 Bounded Rationality Hypothesis Matches are more effective than rebates because people fail to see their equivalence (Davis, Millner and Reilly, 2005) When it is made more clear that the price of giving is the same, there should be no effect Donors with higher levels of cognitive proficiency should react more similar to matches and rebates Cognitive proficiency should moderate match-effect Effect in non-student populations larger

5 Motivational crowd out? At low subsidy level, external incentives may crowd out intrinsic motivation (Frey, Meier) Effect of matches should increase with subsidy Donors with altruistic motives should decrease giving when offered a subsidy Warm glow donors should increase giving When subsidies are no longer offered at subsequent occasions, giving may drop

6 Design Baseline: no framing, price=1 2 (Match/rebate) x 2 (price=.5/.67) design Donation decision (at all, how much) Expected generosity (at all, how much) Measures of socio-demographics and motives for giving from panel survey (Wave 1: 2002) Giving in Tsunami Relief Campaign nine months after experiment (Wave 3: 2005)

7 A replication of the matching effect

8 Distribution of donations

9 Regression results Effects of matches do not vary with level of cognitive proficiency Effects of matches on making a donation at all partly mediated by expectations But not on amount donated Effects of rebates increase with subsidy, but effects of matches do not Joy of giving and altruistic values do not moderate effects of matches (or rebates)

10 Who are most sensitive to matches? Females; large donors; high income hholds Higher educated persons, up to tertiary education; trend reverses among students Those who identify with recipients reduce giving when offered a match No differences with regard to age, religion, home ownership, town size; confidence in charities, solicitations, social pressure, knowing monitoring system

11 Subsidies and subsequent giving Subsidies in experiment do not reduce giving to Tsunami Relief Campaign 9 months later 33% rebate actually increases tsunami giving Matches reduced tsunami giving among altruistic donors, but increased giving among warm glow donors – and they are the majority Matches as well as rebates increase tsunami giving when more generosity is expected

12 Summing up Matches are also more effective than rebates in a random population sample playing with earnings rather than windfall endowments Matches are more effective in getting people to give, but not in getting them to give more Expectations mediate only part of the effect Enhanced effect among higher incomes, moderate-highly educated, and large donors No evidence for crowding out intrinsic motives

13 Discussion If not expectations, then what? Focus on others’ benefit vs. costs for self? Effects at higher amounts? Effects on non-health giving? Are matches a feasible replacement for tax deductions? –Will effect disappear in the long run? –Federal government needed?