Abstract
It is hypothesized that charitable donation provides psychological benefits collectively referred to as the “warm glow”. This study aimed to determine the magnitude of the “warm glow” of charitable donors based on subjective wellbeing data and real-world donation totals obtained from two surveys: the Longitudinal Internet Studies for the Social Sciences (LISS) and the Giving in the Netherlands Panel (GINP). Fixed effect estimates showed that when controlling for such major shocks to happiness as changes in marital status, income, and employment, charitable donors had higher happiness scores. To account for the endogeneity of donating, variation in the types of solicitation by charities was exploited. Some specifications from instrumental variable estimation showed that donating higher amounts of money increases life satisfaction significantly. The results show the local average treatment effect (LATE) for individuals who donate an extra Euro because they are solicited and these individuals would not donate this extra Euro if they were not solicited.
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Notes
The LISS panel contains many variables on personality that might be important for donating behavior. We did not use these personality variables in our analysis because the longitudinal nature of the data allows for controlling time-invariant personality factors.
We assume these changes in donating status are exogenous. Yet, even if it is driven by income shocks, it does not pose a problem for our estimation methodology as income is included in the set of control variables.
All the available waves of the GINP survey were used, not only the 2006 wave, so as to maximize estimation power; however, the same regressions were run for the 2006 dataset separately. The estimates were almost the same, but p values were slightly higher.
This comparison can only be exactly correct when income is an exogenous variable, but, it is very likely that income is an endogenous variable. Nonetheless, this comparison might provide some idea about the effect size.
The diseases included bronchial, cardiovascular, stomach, liver, intestine, kidney, joint, diabetes, nervous system, skin, cancer, brain, and other diseases.
Appeal via street collection, sponsor campaign, church collection, collection at work, television campaigns, an event, advertisement, buying something, lottery tickets, or not solicited.
As GINP asks the amount of money donated in the previous 2 weeks.
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Acknowledgements
The author wishes to thank Peter Kooreman, Erzo F.P. Luttmer, and three anonymous referees for their valuable comments on this research.
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Ugur, Z.B. Donate More, Be Happier! Evidence from the Netherlands. Applied Research Quality Life 13, 157–177 (2018). https://doi.org/10.1007/s11482-017-9512-0
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DOI: https://doi.org/10.1007/s11482-017-9512-0