Does charitable gambling crowd out charitable donations? Using matching to analyze a policy reform
The impact of charitable lotteries on charitable donations depends on the motives of charitable donations, and is thus more an empirical question. Utilizing the propensity score matching method to overcome sample selection bias, this study estimates the effect of lotto outlays on direct charitable donations based on Taiwan’s experience of introducing a lottery in 2002. We find that people’s lottery spending neither crowds out nor crowds in charitable donations after the control group for lottery players is matched by propensity scores. The evidence thus suggests that people are more concerned about how they make their donations.
KeywordsCharitable donation Charitable lottery Crowding-out Altruism Conspicuous giving Propensity score matching
JEL ClassificationC21 D12 D64 H31
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