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


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.


  1. Alesina A, La Ferrara E (2005) Preferences for redistribution in the land of opportunities. J Public Econ 89:897–931CrossRefGoogle Scholar
  2. Andreoni J (1988) Privately provided public goods in a large economy: the limits of altruism. J Public Econ 35:57–73CrossRefGoogle Scholar
  3. Andreoni J (1989) Giving with impure altruism: applications to charity and Ricardian equivalence. J Polit Econ 97:1447–1458CrossRefGoogle Scholar
  4. Andreoni J (1990) Impure altruism and donations to public goods: a theory of warm-glow giving. Econ J 100:464–477CrossRefGoogle Scholar
  5. Andreoni J (1993) An experimental test of the public-goods crowding-out hypothesis. Am Econ Rev 83(5):1317–1327Google Scholar
  6. Benabou R, Tirole J (2006) Incentives and prosocial behavior. Am Econ Rev 96(5):1652–1678CrossRefGoogle Scholar
  7. Brooks AC (2006) Who really cares: the surprising truth about compassionate conservatism. Basic Books, New YorkGoogle Scholar
  8. Camerer C (2015) The promise and success of lab-field generalizability in experimental economics: a reply to Levitt and List”. In: Schotter A (ed) Frechette G. Handbook of experimental economic methodology. Oxford Univ. Press, OxfordGoogle Scholar
  9. Chan K, Godby R, Mestelman S, Muller RA (2002) Crowding-out voluntary contributions to public goods. J Econ Behav Organ 48:305–317CrossRefGoogle Scholar
  10. Coffman L, Featherstone CR, Kessler JB (2015) A model of information nudges. Working PaperGoogle Scholar
  11. Congressional Budget Office (2012) The distribution of household income and federal taxes, 2008 and 2009Google Scholar
  12. Cruces G, Perez-Truglia R, Tetaz M (2013) Biased perceptions of income distribution and preferences for redistribution: evidence from a survey experiment. J Public Econ 98:100–112CrossRefGoogle Scholar
  13. Davis D (2016) Experimental methods for the general economist: five lessons from the lab. South Econ J 82(4):1046–1058CrossRefGoogle Scholar
  14. Eckel CC, Grossman PJ (1996) Altruism in anonymous dictator games. Game Econ Behav 16:181–191CrossRefGoogle Scholar
  15. Eckel CC, Grossman PJ, Johnston MR (2005) An experimental test of the crowding out hypothesis. J Public Econ 89:1543–1560CrossRefGoogle Scholar
  16. Eplay N, Gilovich T (2016) The mechanics of motivated reasoning. J Econ Perspect 30(3):133–140CrossRefGoogle Scholar
  17. Fallucchi F, Luccasen RA, Turocy TL (2017) Behavioural types in public good games: a re-analysis by hierarchical clustering. Working PaperGoogle Scholar
  18. Flynn DJ, Nyhan B, Reifler J (2016) The nature and origins of misperceptions: Understanding false and unsupported beliefs about politics. Working paperGoogle Scholar
  19. Golman R, Hagmann D, Loewenstein G (2017) Information avoidance. J Econ Lit 55(1):96–135CrossRefGoogle Scholar
  20. Gronberg T, Luccasen RA, Turocy TL, Van Huyck JB (2012) Are tax-financed contributions to a public good completely crowded-out? Experimental evidence. J Public Econ 96:596–603CrossRefGoogle Scholar
  21. Korenok O, Millner E, Razzolini L (2014) Taking or giving? The price of giving: how much do individuals dislike taking? Working paperGoogle Scholar
  22. Khanna J, Posnett J, Sandler T (1995) Charity donations in the UK: new evidence based on panel data. J Public Econ 56:257–272CrossRefGoogle Scholar
  23. Khanna J, Sandler T (2000) The crowding-in effect of UK government grants. Eur Econ Rev 44:1543–1556CrossRefGoogle Scholar
  24. Kranton RE, Sanders SG (2017) Groupy versus non-groupy social preferences: personality, region, and political party. Am Econ Rev 107(5):65–69CrossRefGoogle Scholar
  25. Kuklinski JH, Quirk PJ, Jerit J, Schwieder D, Rich RF (2000) Misinformation and the currency of democratic citizenship. J Polit 62:790–816CrossRefGoogle Scholar
  26. Li SX, Eckel CC, Grossman PJ, Brown TL (2011) Giving to government: voluntary taxation in the lab. J Public Econ 95:1190–1201CrossRefGoogle Scholar
  27. Luccasen RA, Grossman PJ (2017) Warm-glow giving: earned money and the option to take. Econ Inq 55(2):996–1006CrossRefGoogle Scholar
  28. Norton MI, Ariely D (2011) Building a better America–one wealth quintile at a time. Perspect Psychol Sci 6:9–12CrossRefGoogle Scholar
  29. Payne A (2001) Measuring the effect of federal research funding on private donations at research universities: is federal research funding more than a substitute for private donations? Int Tax Public Finance 8:731–751CrossRefGoogle Scholar
  30. Piketty T (1995) Social mobility and redistributive politics. Q J Econ 110(3):551–584CrossRefGoogle Scholar
  31. Rondeau D, List J (2008) Matching and challenge gifts to charity: evidence from laboratory and natural field experiments. Exp Econ 11(3):253–267CrossRefGoogle Scholar
  32. Wilhelm M (2010) Giving to organizations that help people in need: Differences across denominational identities. J Sci Stud Relig 49:389–412CrossRefGoogle Scholar

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

Personalised recommendations