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IZA
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Charitable Giving as a Gift Exchange: Evidence from a Field Experiment
by
Armin Falk
(May 2004)
revised version published as 'Gift Exchange in the Field' in: Econometrica, 2007, 75 (5), 1501-1511
Abstract:
This study reports data from a field experiment that was conducted to investigate the
relevance of gift-exchange for charitable giving. Roughly 10,000 solicitation letters were sent
to potential donors in the experiment. One third of the letters contained no gift, one third
contained a small gift and one third contained a large gift. Whether a potential donor received
a letter with or without a gift was randomly determined. We observe strong and systematic
effects from including gifts. Compared to the no gift condition, the relative frequency of
donations increased by 17 percent if a small gift was included and by 75 percent for a large
gift. Consequently, including gifts was highly profitable for the charitable organization. The
contribution of this paper is twofold: first, it shows that gift-exchange is important for
charitable giving, in addition to the warm-glow motive. Second, the paper confirms the
economic relevance of reciprocity by using field data. This extends the current body of
research on reciprocity, which is almost exclusively confined to laboratory studies.
Text: See Discussion Paper No. 1148
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