Whether and How Much to Give: Uncovering the Contrasting Determinants of the Decisions of Whether and How Much to Give to Charity with Two-Stage Alternatives to the Prevailing Tobit Model

Abstract

Charitable giving involves two seemingly distinct decisions: whether to give and how much to give. However, many researchers methodologically assume that these decisions are one and the same. The present study supports the argument that this is an incorrect assumption that is likely to generate misleading conclusions, in part, since the second decision is much more financial in nature than the first. The argument that charitable giving entails two distinct decisions is validated by empirically dismissing the prevailing Tobit model, which assumes a single decision, in favor of less restrictive two-stage approaches: Cragg’s model and the Heckman model. Most importantly, it is shown that only by adopting a two-stage approach may it be uncovered that common determinants of charitable giving such as income and gender affect the two decisions at hand very differently. Data comes from a high-quality 2012 Danish survey and administrative registers.

Résumé

Les dons de bienfaisance impliquent deux décisions de toute apparence distinctes : donner ou non et combien. Plusieurs chercheurs présument cependant, sur une base méthodologique, que ces décisions sont identiques. La présente étude appuie l’argument que cette supposition est incorrecte et qu’elle mènera vraisemblablement à des conclusions trompeuses, en partie parce que la seconde décision est de nature beaucoup plus financière que la première. L’argument voulant que les dons de bienfaisance impliquent deux décisions distinctes est validé par le rejet empirique du modèle Tobit dominant, qui tient compte d’une seule décision, pour favoriser des approches en deux phases moins contraignantes : le modèle de Cragg et le modèle Heckman. Il est surtout démontré que ce n’est qu’en adoptant une approche en deux phases que les déterminants courants des dons de bienfaisance, dont le revenu et le sexe, influencent très différemment les deux décisions en question. Les données proviennent d’une enquête danoise de 2012 et de registres administratifs de qualité supérieure.

Zusammenfassung

Das wohltätige Spenden beinhaltet zwei scheinbar unterschiedliche Entscheidungen: die Frage, ob man spenden soll und die Frage, wieviel man spenden soll. Allerdings gehen viele Forscher methodologisch davon aus, dass diese Fragen ein und dieselbe Entscheidung darstellen. Die vorliegende Studie unterstützt das Argument, dass diese Annahme falsch ist und wahrscheinlich zu irreführenden Schlussfolgerungen führt; zum Teil weil die zweite Entscheidung im Vergleich zur ersten Entscheidung mehr finanzieller Art ist. Das Argument, dass das wohltätige Spenden zwei unterschiedliche Entscheidungen beinhaltet, wird durch eine empirische Ablehnung des vorherrschenden Tobit-Modells, das von einer einzigen Entscheidung ausgeht, zugunsten weniger restriktiver Zwei-Stufen-Ansätze bestätigt - dem Cragg-Modell und dem Heckman-Modell. Vor allem wird dargelegt, dass nur durch die Anwendung eines Zwei-Stufen-Ansatzes aufgedeckt werden kann, dass sich gemeinsame Determinanten für wohltätiges Spenden, z. B. Einkommen und Geschlecht, äußerst unterschiedlich auf die beiden Entscheidungen auswirken. Die Daten stammen aus einer qualitativ hochwertigen dänischen Umfrage von 2012 sowie aus Verwaltungsregistern.

Resumen

La donación benéfica implica dos decisiones aparentemente diferentes: si donar y cuánto donar. Sin embargo, muchos investigadores asumen metodológicamente que estas decisiones son una y la misma. El presente estudio apoya el argumento de que esto es un supuesto incorrecto que probablemente genere conclusiones engañosas, en parte, dado que la segunda decisión es mucho más financiera en naturaleza que la primera. El argumento de que la donación benéfica conlleva dos decisiones diferentes está validado descartando empíricamente el modelo Tobit predominante, que asume una única decisión, a favor de enfoques de dos etapas menos restrictivos: el modelo de Cragg y el modelo de Heckman. Lo que es más importante, se muestra que sólo mediante la adopción de un enfoque de dos etapas puede descubrirse que determinantes comunes de la donación benéfica, tales como los ingresos y el género, afectan a las dos decisiones en cuestión de manera muy diferente. Los datos proceden de una encuesta danesa de 2012 de elevada calidad y de los registros administrativos.

摘要

慈善捐赠涉及两个似乎独特的决定:是否捐赠和捐赠金额。然而,许多研究人员采用的方法假定这些决定是单个相同的决定。当前研究支持的论点是,这是一个不正确的假设,可能会作出误导性的结论,部分由于第二个决定比第一个更具财务性质。凭经验抛弃流行的杜宾模型(该模型假定单个决定),可以验证慈善捐赠包含两个独特决定的论点,倾向于限制较小的两阶段方法:克拉格模型和赫克曼模型。最重要的是,这表明仅可通过采用两阶段方法才能发现慈善捐赠的通用决定性因素,如收入和性别对这两个决定的影响极为不同。数据来自2012年的高质量丹麦调查和性质记录。

要約

慈善活動には、活動を提供するか否か、どの程度提供するかという2つの異なる決定が含まれている。しかし多くの研究者は、決定は一つであり同じであると方法論的に仮定している。本研究では、2番目の決定が最初のものより自然で経済的なために、誤った結論を構築する可能性があるという不適切な前提の議論を支持する。2つの異なる決定を伴う慈善活動では、経験的に現行のトビモデルで否定されることが確証されている。トビモデルは、クラッグのモデルとヘックマンモデルという制限の少ない2 段階アプローチを支持する単一の決定を前提としている。最も重要なのは、慈善活動の収入や性別などの一般的な決定要因が2つの決定に影響を与えることが明らかになるが、これは2 段階のアプローチを採用することによってのみ提示される。データは、質の高い2012デンマーク調査と行政登録に基づいている。

ملخص

العطاء الخيري ينطوي على قرارين من القرارات التي تبدو واضحة: إما تعطي وكم مبلغ العطاء. مع ذلك، العديد من الباحثين الذين يفترضوا منهجيا” أن هذين القرارين واحد ونفس الشيء. تدعم هذه الدراسة حجة أن هذا الإفتراض غير صحيح والتي من المرجح أن ينتج عنه إستنتاجات مضللة، في جزء منه، حيث أن القرار الثاني هو أكثر ماليا” في الطبيعة عن القرار الأول. يتم التحقق من صحة القول بأن العطاء ينطوي على قرارين متميزين برفض تجريبي نموذج (Tobit) السائد ، الذي يفترض وجود قرار واحد، لصالح نهج مرحلتين أقل تقييدا”: نموذج (Cragg) ونموذج (Heckman).الأهم من ذلك، فإنه يظهر أنه فقط من خلال إعتماد نهج المرحلتين يمكن أن يكشف أن العوامل المشتركة في العطاء الخيري مثل الدخل والجنس يؤثر على القرارين اللذان في متناول اليد بشكل مختلف جدا.” البيانات تأتي من إستطلاع الرأي عالي الجودة الدنماركي عام 2012، والسجلات الإدارية.

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Notes

  1. 1.

    The question was accompanied with a text which defined charitable giving to the respondent in the following manor: “Now follows some questions on charitable giving. Charitable giving is when a monetary amount is given away in order to support an organization, association, foundation, or activities that are operated by one of the aforementioned. Charitable giving, regardless of the size of the amount, may be paid continuously, at fund drives, by SMS, or over the internet. Membership fees or not included in charitable giving. The acquisition of goods or services, e.g. secondhand clothes from a volunteer run secondhand store and money given to panhandlers are also not included.

  2. 2.

    An exchange rate of 6 DKK to 1 USD has been used.

  3. 3.

    A third marginal effect, which may be derived from the Tobit model, is on the average amount of giving from all individuals regardless of whether or not they give [E(y | x)]. Since the distinctiveness of the decisions of whether and how much to give is of interest to the present study, this marginal effect is not considered further.

  4. 4.

    One impact of this strong assumption is that a variable which, for example, has a negative impact on the first decision is not allowed to have a positive impact on the second decision (Cragg, 1971).

  5. 5.

    Another difference between the two-stage models is that the Heckman model assumes first-stage dominance and Cragg’s model does not. In other words, potential donors from the first stage cannot give zero in the second stage, according to the Heckman model, whereas they can, according to Cragg’s model (Forbes and Zampelli, 2011).

  6. 6.

    For future studies, it is highly warranted to search for theoretically grounded exclusion criteria that will increase the applicability of the Heckman model within the study of charitable giving.

  7. 7.

    AIC = −2 ln L + 2k and BIC = −2 ln L + k ln N, where ln L is the maximized log-likelihood, k is the number of parameters estimated, and N is the sample size (Schwarz, 1978).

  8. 8.

    Forbes and Zampelli (2011) find that women give less than men but they do not test whether women are more likely to give.

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Acknowledgement

This study is supported by a donation from the Realdania Foundation. The author would furthermore like to acknowledge the helpful input from Ph.D. Candidate Hans-Peter Y. Qvist in connection with this study. Any errors are my own.

Funding

This study was, in part, made possible by a contribution from the Realdania Foundation.

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Correspondence to Erik Petrovski.

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Appendices

Appendix 1

The log-transformed distribution of the dependent variable is shown in the q–q plot on the bottom (Fig. 2). The log-transformed dependent variable much better approximates a straight line and therefore a normal distribution compared to the q–q plot on the top (Fig. 1), which shows the original distribution of the dependent variable (before log-transformation):

Fig. 1
figure1

Q–q plot of the non log-transformed dependent variable at y > 0

Fig. 2
figure2

Q–q plot of the log-transformed dependent variable at y > 0

Appendix 2

See Table 3.

Table 3 Model comparison of Tobit, Cragg’s, and the Heckman model with raw coefficients reported

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Petrovski, E. Whether and How Much to Give: Uncovering the Contrasting Determinants of the Decisions of Whether and How Much to Give to Charity with Two-Stage Alternatives to the Prevailing Tobit Model. Voluntas 28, 594–620 (2017). https://doi.org/10.1007/s11266-017-9828-2

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Keywords

  • Charitable giving
  • Tobit
  • Cragg
  • Heckman
  • Income
  • Gender