1. Altruism & Social Pressure
Testing for altruism and social pressure in charitable giving
DellaVigna, List, Malmendier 2009
Janina Pehws

2. Overview Introduction Model Experimental design Hypothesis Results
Conclusion
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3. Introduction
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4. Introduction
Two motivations for giving:
altruism/ warm glow
social pressure
Altruism: donate, because they care about a specific worthy case
Warm glow: donate, because they enjoy the feeling of giving
Social pressure: donate, because they dislike to be seen as not giving (would prefer not to give)
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5. Introduction Model + Field Experiment Test for 2 types of motivations
 which of the models fits observations better
(with or without social pressure)
Test for the welfare effect of donating
Is donating welfare enhancing?
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6. Model Utility maximization:
s: Social pressure cost (of not giving/giving small amounts)
No social pressure  S=0
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7. Experimental design Field experiment: Door-to-door fund-raising
Treatments:
charity treatment (ask for donation):
7,669 households
Survey treatment (ask questions about charitable giving):
1,866 households
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8. Experimental design Treatments: Baseline: just knock/ring bell
Flyer: visit is announced a day before
Opt-out: flyer includes box, if box is checked  solicitors do not knock on the door
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9. Hypothesis Hypothesis:  Giving would be welfare enhancing
If people give due to altruism, flyer should increase presence at home and giving (or give through other means)
 Giving would be welfare enhancing
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10. Results Results from OLS Regression:
Flyer: Reduces Probability of opening the door by 10%
BUT: Giving is higher (sorting in of altruists)
Opt-out : Reduces Probability of opening the door by 25%
BUT: - Number of large donations increases
- social pressure cost is reduced
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11. Results Results from OLS Regression:
Some give due to altruism (> $10)
some give due to social pressure (< $10)
Median amount given: $10
Donation due to altruism: large donations (> $10)
Donation due to social pressure: small donations (< $10)
stronger evidence for role of social pressure: ½ of donators would prefer not to give (not to be contacted)  they opt out, when they can (and don´t give through other means)
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12. Results Janina Pehws Experimental and Behavioral Economics 06.06.201612

13. Results Results from minimum-distance estimator:
Social pressure cost: $3.5 (local charity)
Unsolicited Fundraising is welfare decreasing (for giver)
local charity: welfare (giver) − $1.04 / welfare (net) + $0.35
Hypothesis rejected
With S=0 the model cannot explain opting out
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14. Conclusion
Both Altruism and social pressure play a role in charitable giving
Negative welfare effect (because of social pressure costs)
Solution:
Flyer
Opt-out
 Win-win for charity & households
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15. Thank you for your attention! Do you have any questions??
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