WARM‐GLOW GIVING: EARNED MONEY AND THE OPTION TO TAKE |
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| Authors: | Andrew Luccasen Philip J Grossman |
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| Affiliation: | 1. 662‐329‐7256662‐329‐7458;2. Associate Professor, Department of Business, Mississippi University for Women, Columbus, MS |
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| Abstract: | Giving in dictator games has been shown to vary with the nature of the endowment (earned vs. house money) and the action space (give only vs. the option to give or take). This article is the first to test if these factors similarly affect warm‐glow giving alone. There is no reason that one would expect the same outcomes given that the motivations for warm‐glow giving are different from the motivations for total (warm‐glow plus purely altruistic) giving. We find that warm‐glow giving to charity or philanthropic institutions in a real‐donation experiment increases when the endowment is earned. The option to take does reduce warm‐glow giving to charity, but significant giving remains. Our results suggest that donating earned income creates greater utility than donating an equal amount from a windfall gain, and that warm glow comes not merely from the act of giving, but also from the characteristics of the recipient. (JEL C90, D64, H41) |
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