Atkinson, A. B.
The Economics of Giving for Overseas Development. Southampton, UK, Southampton Statistical Sciences Research Institute, 17pp.
(S3RI Applications & Policy Working Papers, (A08/03) ).
Giving by individuals for development has been illustrated recently by some spectacular examples. A few people giving very large sums, and a very large number of people giving modest amounts, are both important phenomena in the field of development finance. This paper considers how in theory such behaviour might be explained using the tools of economic analysis. The paper is about the economics of giving, but focused on why people give to a particular cause – world development. There has been an extensive literature on the total volume of giving, but much less on the allocation by cause. Giving for development does not seem to be adequately explained by either the “warm-glow” or the “public good” models. The paper suggests a new “identification” approach to individual giving, which combines the results focus of the public goods formulation with the scale of the warm glow model. The analysis initially treats giving for development in isolation, but goes on to examine how development causes fit into the pattern of overall charitable giving by individuals and the pattern of giving over the individual lifetime.
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