Template-Type: ReDIF-Paper 1.0
Author-Name: Paul Missios
Author-X-Name-First: Paul
Author-X-Name-Last: Missios
Author-Email: pmissios@economics.ryerson.ca 
Author-Workplace-Name: Department of Economics, Ryerson University, Toronto, Canada
Author-Name: Ida Ferrara
Author-X-Name-First: Ida
Author-X-Name-Last: Ferrara
Author-Email: iferrara@yorku.ca
Author-Workplace-Name: Department of Economics, York University, Toronto, Canada
Title: Trust, Ability-to-Pay, and Charitable Giving
Abstract: In the literature on privately provided public goods, altruism has been motivated by what contributions can accomplish (public goods philanthropy), by the pleasure of giving (warm-glow philanthropy),
or by the desire to personally make a difference (impact philanthropy). We revisit these motives but allow for income heterogeneity and distrust in the institutional structures involved. We also model socially
motivated philanthropy when income-heterogeneous donors take trust and ability-to-pay into account.
We show key differences across the four models in terms of crowding out and in the effects of income
distribution. In the socially motivated model, low-income donors may contribute more than high-income
donors, giving theoretical foundation to the frequently observed "U-shaped" pattern of giving.
Classification-JEL: D03, H31, H41, Q53
Keywords: Philanthropy, Social Motivation, Trust, Ability to Pay, Crowding Out.
Length: 41 pages
Creation-Date: 2015-11
Number: 061
File-URL: http://economics.ryerson.ca/workingpapers/wp061.pdf
File-Format: Application/pdf
Handle: RePEc:rye:wpaper:wp061