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Matching Grants and Charitable Giving: Why People Sometimes Provide a Helping Hand to Fund Environmental Goods

Published online by Cambridge University Press:  15 September 2016

Koji Kotani ,
Kent D. Messer  and
William D. Schulze
Koji Kotani
Affiliation:
International Development Program in the Graduate School of International Relations at the International University of Japan in Niigata, Japan
Kent D. Messer
Affiliation:
Department of Food and Resource Economics and the Department of Economics at the University of Delaware in Newark, Delaware
William D. Schulze
Affiliation:
Department of Applied Economics and Management at Cornell University in Ithaca, New York
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Abstract

Matching grants are a prevalent mechanism for funding environmental, conservation, and natural resource projects. However, economists have largely been silent regarding the potential benefits of these mechanisms at increasing voluntary contributions. To examine the behavioral responses to different match levels, this research uses controlled laboratory experiments with generically framed instructions and introduces a general-form matching-grant mechanism, referred to as the proportional contribution mechanism (PCM). Results show that contributions are positively correlated with both the match and the induced value of the public good even when a dominant strategy is free-riding. An implication of this partial demand revelation result is that manifestations of this type of “helping hand” social preference should be counted in benefit-cost analysis.

Keywords

matching grantspublic goodscharitable givingvoluntary contributionsexperimental economicswarm glowhelping hand
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 39 , Issue 2 , April 2010 , pp. 324 - 343
Copyright
Copyright © 2010 Northeastern Agricultural and Resource Economics Association 

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