An Econometric Analysis of Charitable Giving With Interdependent Preferences

Many economists and social scientists have conjectured that individual gifts to charity may be interdependent. This paper explores empirically how an individual's charitable contributions may be affected by the giving of others in a “reference group” of similar individuals. We find modest evidence of interdependence of preferences through these reference groups, although the aggregate effects are not large. Hence, we conclude that the inferences from standard models, which ignore interdependence of preferences, are not likely to be misleading. ( JEL H31, H41, D12)