Abstract
Economic theory ascribes the primary role in the provision of public goods to government. This emphasis on government overlooks the role of the not-for-profit sector in providing collective-type goods. In this paper we seek to determine the factors influencing charitable contributions to private nonprofit organizations by estimating a demand function for the output of these collective-good providers. Specifically, we test the hypothesis that voluntary giving is responsive to conventional market variables such as advertising expenditures, price, and quality. Overall, the results are strongly supportive.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 83-96 |
| Number of pages | 14 |
| Journal | Journal of Public Economics |
| Volume | 30 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jun 1986 |
Funding
*We thank Alphonse Holtman and Robert Triest for comments on an earlier draft. SuPPort for this research was provided by The Brookings Institution, the Ford Foundation, and the Graduate School of the University of Wisconsin-Madison. The views expressed herein are solely those of the authors, and do not necessarily represent the views of the Federal Reserve. ‘The role of nonprofit organizations as a substitute for government provision has not been lost on political decision-makers. For example, the Reagan administration has frequently called upon the private sector to expand its activities in areas where government involvement is reduced, and the Economic Recovery Tax Act of 1981 sought to encourage charitable contributions by allowing even nonitemizers to deduct a portion of their contributions to charity.
ASJC Scopus subject areas
- Finance
- Economics and Econometrics