Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving
1990/06/01 by James Andreoni · 88 citations
Economics, Econometrics and Finance · Social Sciences · #Fiscal Policy and Economic Growth #Gender, Labor, and Family Dynamics #Economic theories and models
paper · doi:10.2307/2234133
Abstract
When people make donations to privately provided public goods, such as charity, there may be many factors influencing their decision other than altruism. Social pressure, guilt, sympathy, or simply a desire for a "warm glow" may all be important. This paper considers such impure altruism formally and develops a wide set of implications. In particular, this paper discusses the invariance proposition of public goods, solves for the sufficient conditions for neutrality to hold, examines the optimal tax treatment of charitable giving, and calibrates the model based on econometric studies in order to consider policy experiments. Impure altruism is shown to be more consistent with observed patterns of giving than the conventional pure altruism approach, and to have policy implications that may differ widely from those of the conventional models. Copyright 1990 by Royal Economic Society.
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