McMaster
Experimental Economics Laboratory R.
Andrew Muller
CROWDING OUT VOLUNTARY CONTRIBUTIONS TO PUBLIC GOODS
Kenneth S. Chan, McMaster University
Rob Godby, University of Wyoming
Stuart Mestelman, McMaster University
R. Andrew Muller, McMaster University
November 2000
Abstract
We test the null hypothesis that involuntary transfers for the provision
of a public good will completely crowd out voluntary transfers against
a warm-glow hypothesis that crowding-out will be incomplete because individuals
care about giving. Our design extends existing work by considering
two levels of the involuntary transfer and by using a design in which all
subjects see all transfer treatments. We analyse the data with careful
attention to boundary effects. The data reject the null hypothesis
of complete crowding-out of voluntary transfers over the range of involuntary
transfers considered but suggest that crowding-out increases as the involuntary
transfer increases and sufficiently large involuntary transfers may offset
the benefits of warm-glow giving.
Full Text [ pdf
]