More giving or more givers? The effects of tax incentives on charitable donations in the UK

Miguel Almunia, Irem Guceri, Ben Lockwood, Kimberley Scharf*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


This paper estimates the effects of tax incentives on charitable contributions in the UK, using the universe of self-assessment income tax returns between 2005 and 2013. We exploit variation from a large reform in 2010 to estimate intensive- and extensive-margin tax-price elasticities of giving. Using a predicted-tax-rate instrument for the price of giving relative to consumption, we find an intensive-margin elasticity of about − 0.2 and an extensive-margin elasticity of − 0.1, yielding a total elasticity of about − 0.3. To further explore the extensive-margin response, we propose a model with a fixed cost of declaring donations and obtain a structural estimate of that cost of around £47. We also study the welfare effects of tax incentives, extending the theoretical literature to allow for extensive-margin giving and for a fixed cost of declaring donations. Taking into account these factors, there is a case for increasing the subsidy on charitable giving in the UK.

Original languageEnglish
Article number104114
JournalJournal of Public Economics
Publication statusPublished - Mar 2020

Bibliographical note

Publisher Copyright:
© 2019

Copyright 2020 Elsevier B.V., All rights reserved.


  • Charitable donations
  • Incentive effects of taxation

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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