Kira Lancker, University of Copenhagen (IFRO)

"Do private incentives crowd out public good donations? Evidence from a lab-in-the-field experiment"

Abstract

When contributions to public goods bring added private benefits, those additional gains may crowd out the individual's motivation to contribute. We study this effect through a lab-in-the-field, within-individual experiment with 2,058 participants from rural Senegal, involving two donation games: one with a private incentive (``impure'') and the other without (``pure''). We show in a simple theoretical model how the games identify a mechanism whereby the private incentive changes the marginal warm glow from donations, potentially leading to motivational crowding out. Then we estimate an individual fixed effects model and find strong evidence for motivational crowding out. Respondents who play the impure game after playing the pure game reduce their donations by 5-35\%. This reduction is increasing and convex in pure game donations, which suggests that the distribution of donations across donors affects the aggregate motivational crowding out effect. We study individual-level heterogeneity using causal forests and find that wealthier and better educated households are more susceptible to motivational crowding out.

Contact person: Frikk Nesje