Does market size matter for charities?

Research output: Contribution to journalArticlepeer-review

Authors

Colleges, School and Institutes

Abstract

We analyze implications of market size for market structure in the charity sector. While a standard model of oligopolistic for-profit competition predicts a positive relationship between market size and firm size, our analogous model of competition between prosocially motivated charities predicts no such correlation. If charities are biased towards their own provision, a positive association between market size and provider size can arise. We examine these predictions empirically for six different local charity markets. Our empirical findings suggest that charities do not solely pursue prosocial objectives, and that increased competition in the charity sector can lead to rationalization in provision.

Details

Original languageEnglish
Pages (from-to)127-145
Number of pages19
JournalJournal of Public Economics
Volume168
Early online date7 Nov 2018
Publication statusPublished - Dec 2018

Keywords

  • Competition in charity sectors, Market structure