The Price Elasticity of Charitable Giving: Does the Form of Tax Relief Matter?

Kimberley Scharf, Sarah Smith*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

We use a survey-based approach to compare the effects of alternative forms of tax relief on donations—a tax rebate for the donor and a matched payment to the charity. On accounting grounds these two are equivalent but, in line with earlier experimental studies, we find that charitable contributions are significantly more responsive to a match than to a rebate. The difference can largely be explained by the fact that a majority of donors do not adjust their nominal donations in response to a change in subsidy. We relate our findings to the growing literature on behavioural tax policy.

Original languageEnglish
Pages (from-to)330-352
Number of pages23
JournalInternational Tax and Public Finance
Volume22
Issue number2
Early online date21 Feb 2014
DOIs
Publication statusPublished - Apr 2015

Keywords

  • Charitable giving
  • Match and rebate
  • Salience
  • Tax incentives

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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