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Social Choice and Welfare

, Volume 49, Issue 2, pp 387–409 | Cite as

Giving to poverty relief charities: the impact of beliefs and misperceptions toward income redistribution in a real donation experiment

  • R. Andrew LuccasenIIIEmail author
  • M. Kathleen Thomas
  • Philip J. Grossman
Original Paper
  • 518 Downloads

Abstract

Many Americans hold erroneous beliefs regarding the level of inequality in the United States and the efforts by the federal government to alleviate poverty. In general, they overestimate the extent of poverty relief undertaken by government. Given that poverty relief programs are a public good and likely underprovided, overestimation of the level of income redistribution is likely to exacerbate this under-provision by reducing giving to private charities. This paper considers if this misperception affects giving to poverty-relief charities. We report a real-donation experiment investigating links between contributions to poverty-relief charities and perceptions of federal transfers to low income households. We also ask participants to self-identify political affiliation, religiosity, race, and gender. We find that donations to our poverty relief charities are inversely related to the perceived transfers made to the poorest quintile. Donations are approximately $0.20 less for each $1000 of perceived transfers. Interestingly, we find little correlation between giving and political beliefs.

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Copyright information

© Springer-Verlag GmbH Germany 2017

Authors and Affiliations

  • R. Andrew LuccasenIII
    • 1
    Email author
  • M. Kathleen Thomas
    • 2
  • Philip J. Grossman
    • 3
  1. 1.Department of BusinessMississippi University for WomenColumbusUSA
  2. 2.Department of Finance and EconomicsMississippi State UniversityMississippi StateUSA
  3. 3.Department of EconomicsMonash Business School, Monash UniversityClaytonAustralia

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