The effect of earned endowments and tangible money on charitable giving

We design and conduct an experiment to determine whether participants’ physical handling of money affects their choices as a dictator to take from or give to charity. We run separate treatments for house money and earned endowments. We report three results. First, tangible endowments reduce, but do not eliminate, charitable giving. Second, participants are more likely to take in the tangible treatments than to the intangible treatments. Finally, we do not observe a consistent earned money effect. With tangible endowments, earned money significantly reduces giving; with intangible endowments, we find that earned money has no significant effect on giving. This contrasts with prior studies that found that earning one’s endowment reduced giving in standard Dictator Games (i.e. those with anonymous other subjects as recipients). Our results suggest that the nature of the recipient and the action set are important factors for making decisions in the laboratory.