Peer Effects in Charitable Giving: Evidence from the (Running) Field

Authors


  • This research was funded by the Leverhulme Foundation (Grant F/00 182/A2) and the Economic and Social Research Council (Grant RES-343-28-0001). Thanks to Justgiving for providing us with their data and to two anonymous referees, Rachel Griffith, Clare Leaver, Abigail Payne and Kimberley Scharf and participants at seminars in Essex, Mannheim, Rotterdam, Southampton, Stirling, the workshop on the social dimension of organisations at the CUI in Budapest and the CEPR conference on charitable giving and altruism, Paris, for helpful comments and discussions. Any views – and in particular any errors – are our own.

Abstract

There is a widespread belief that peer effects are important in charitable giving but little evidence on how donors respond to their peers. Analysing a unique data set of donations to online fund-raising pages, we find positive and sizeable peer effects: a £10 increase in the mean of past donations increases giving by £2.50, on average. Donations respond to both very large and very small amounts and to changes in the mode. We find little evidence that donations signal charity quality – our preferred explanation is that donors use information on earlier donations to decide what is appropriate for them to give.

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