Are Political and Charitable Giving Substitutes? Evidence from the United States

100 Pages Posted: 15 Mar 2021 Last revised: 31 Mar 2021

See all articles by Ricardo Perez-Truglia

Ricardo Perez-Truglia

University of California, Berkeley; National Bureau of Economic Research (NBER)

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE)

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management; Russian Presidential Academy of National Economy and Public Administration (RANEPA); Centre for Economic Policy Research (CEPR)

Pinar Yildirim

University of Pennsylvania - The Wharton School

Date Written: March 2021

Abstract

We provide evidence that individuals substitute between political contributions and charitable contributions, using micro data from the American Red Cross and Federal Election Commission. First, in a lab experiment, we show that information on the importance of charitable giving increases donations to charities and reduces donations to politics, while information on the importance of political campaigns has the opposite effect. We also show that similar results hold in observational data. We find that foreign natural disasters, which are positive shocks to charitable giving, crowd out political giving. We also find that political advertisement campaigns, which are positive shocks to political giving, crowd out charitable giving. Our evidence suggests that some individuals give to political and charitable causes to satisfy similar needs.

Suggested Citation

Perez-Truglia, Ricardo and Petrova, Maria and Simonov, Andrei and Yildirim, Pinar, Are Political and Charitable Giving Substitutes? Evidence from the United States (March 2021). CEPR Discussion Paper No. DP15907, Available at SSRN: https://ssrn.com/abstract=3805322

Ricardo Perez-Truglia (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Maria Petrova

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain

Andrei Simonov

Michigan State University - Eli Broad Graduate School of Management ( email )

645 N. Shaw Lane, 321 Eppley Center
East Lansing, MI 48824-1122
United States

HOME PAGE: http://www.andreisimonov.com

Russian Presidential Academy of National Economy and Public Administration (RANEPA) ( email )

Vernadskogo Prospect 82
Moscow, 119571
Russia

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Pinar Yildirim

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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