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Transaction costs, the opportunity cost of time and procrastination in charitable giving

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  • Knowles, Stephen
  • Servátka, Maroš
Abstract
We conduct a laboratory experiment to study whether giving people more time to donate to charity reduces donations. People may intend to donate, but because of the transaction costs of doing so, postpone making the payment until they are less busy, and having postponed making the donation once, keep postponing. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. We find evidence of a transaction cost reducing donations, with the size of this effect depending on the opportunity cost of time, but no statistically significant evidence that giving people more time to donate increases procrastination and thus reduces donations.

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  • Knowles, Stephen & Servátka, Maroš, 2015. "Transaction costs, the opportunity cost of time and procrastination in charitable giving," Journal of Public Economics, Elsevier, vol. 125(C), pages 54-63.
    • Handle: RePEc:eee:pubeco:v:125:y:2015:i:c:p:54-63
    DOI: 10.1016/j.jpubeco.2015.03.001
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    Cited by:

    1. C. Mónica Capra & Bing Jiang & Yuxin Su, 2022. "Do pledges lead to more volunteering? An experimental study," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 87-100, January.
    2. Castillo, Marco & Petrie, Ragan & Wardell, Clarence, 2023. "Barriers to charitable giving," Journal of Public Economics, Elsevier, vol. 224(C).
    3. Umer, Hamza & Kurosaki, Takashi & Iwasaki, Ichiro, 2022. "Unearned Endowment and Charity Recipient Lead to Higher Donations: A Meta-Analysis of the Dictator Game Lab Experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    4. Knowles, Stephen & Servátka, Maroš & Sullivan, Trudy & Genç, Murat, 2021. "The Non-Monotonic Effect of Deadlines on Task Completion," MPRA Paper 109484, University Library of Munich, Germany.
    5. Jeremy Clark & Arlene Garces-Ozanne & Stephen Knowles, 2016. "Dire Straits v The Cure: Emphasising the Problem or the Solution in Charitable Fundraising for International Development," Working Papers 1608, University of Otago, Department of Economics, revised Oct 2016.
    6. Dirkmaat, Thomas & Rohde, Kirsten I.M. & van de Veer, Evelien & van Dijk, Bram & Yu, Xiao, 2023. "Managing “Last Moment Behavior”: Non-binding target dates to reduce the spikes in task completion at deadlines," Journal of Public Economics, Elsevier, vol. 219(C).
    7. Fosgaard, Toke R. & Soetevent, Adriaan R., 2022. "I will donate later! A field experiment on cell phone donations to charity," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 549-565.
    8. Toke R. Fosgaard & Adriaan (A.R.) Soetevent, 2018. "Promises Undone: How Committed Pledges Impact Donations to Charity," Tinbergen Institute Discussion Papers 18-044/VII, Tinbergen Institute.
    9. Hsiao, Yu-Chin & Kemp, Simon & Servátka, Maroš & Ward, Matt & Zhang, Le, 2021. "Time Costs and Search Behavior," MPRA Paper 105412, University Library of Munich, Germany.
    10. Elizabeth Lyons & Laurina Zhang, 2019. "Trade-offs in motivating volunteer effort: Experimental evidence on voluntary contributions to science," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-12, November.
    11. Stephen Knowles & Maroš Servátka & Trudy Sullivan, 2014. "Deadlines, Procrastination, and Inattention in Charitable Giving: A Field Experiment," Working Papers 1501, University of Otago, Department of Economics, revised Mar 2014.
    12. Damgaard, Mette Trier & Gravert, Christina, 2017. "Now or never! The effect of deadlines on charitable giving: Evidence from two natural field experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 78-87.
    13. Stephen Knowles & Maroš Servátka & Trudy Sullivan & Murat Genç, 2022. "Procrastination and the non‐monotonic effect of deadlines on task completion," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 706-720, April.
    14. Knowles, Stephen & Servátka, Maroš & Sullivan, Trudy, 2016. "Deadlines, Procrastination, and Inattention in Charitable Tasks: A Field Experiment," MPRA Paper 69621, University Library of Munich, Germany.
    15. Zheng, Chundong & Liu, Xinru & Liu, Shuqin, 2024. "How to make busy individuals donate more? The matching effect of charitable appeals and busyness on willingness to donate," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    16. Azizbek Tokhirov, 2023. "Patience and Giving: Global Evidence Based on Longitudinal and Linguistic Data," CERGE-EI Working Papers wp771, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    17. Kellner, Christian & Reinstein, David & Riener, Gerhard, 2019. "Ex-ante commitments to “give if you win” exceed donations after a win," Journal of Public Economics, Elsevier, vol. 169(C), pages 109-127.
    18. Jakub Dostál, 2020. "Revealed value of volunteering: A volunteer centre network," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(2), pages 319-345, June.
    19. Fosgaard, Toke R. & Soetevent, Adriaan, 2018. "Promises Undone," Research Report 2018006, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    20. Hutchinson-Quillian, Jessan & Reiley, David & Samek, Anya, 2021. "Hassle costs and workplace charitable giving: Field experiments with Google employees," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 679-685.
    21. Knowles, Stephen & Servátka, Maroš & Sullivan, Trudy & Genç, Murat, 2017. "Deadlines, Procrastination, and Forgetting in Charitable Tasks: A Field Experiment," MPRA Paper 83694, University Library of Munich, Germany.
    22. Jeremy Clark & Arlene Garces-Ozanne & Stephen Knowles, 2018. "Emphasising the Problem or the Solution in Charitable Fundraising for International Development," Journal of Development Studies, Taylor & Francis Journals, vol. 54(6), pages 1082-1094, June.
    23. Steffen Altmann & Christian Traxler & Philipp Weinschenk, 2022. "Deadlines and Memory Limitations," Management Science, INFORMS, vol. 68(9), pages 6733-6750, September.

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    More about this item

    Keywords

    Charitable giving; Dictator game; Transaction costs; Opportunity cost of time; Procrastination; Inattention;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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