We test how donors respond to new information about a charity’s effectiveness. Freedom from Hunger implemented a test of its direct marketing solicitations, varying letters by whether they include a discussion of their program’s impact as measured by scientific research. The base script, used for both treatment and control, included a standard qualitative story about an individual beneficiary. Adding scientific impact information has no effect on average likelihood of giving or average gift amount. However, we find important heterogeneity: large prior donors both are more likely to give and also give more, whereas small prior donors are less likely to give. This pattern is consistent with two different types of donors: warm glow donors who respond negatively to analytical effectiveness information, and altruism donors who respond positively to such information.
We implemented a randomized field experiment that tested ways to stimulate savings by international migrants in their origin country. We find that migrants value and take advantage of opportunities to exert greater control over financial activities in their home countries. In partnership with a Salvadoran bank, we offered U.S.-based migrants bank accounts in El Salvador. We randomly varied migrant control over El Salvador-based savings by offering different types of accounts across treatment groups. Migrants offered the greatest degree of control accumulated the most savings at the partner bank, compared to others offered less or no control over savings. Impacts are likely to represent increases in total savings: there is no evidence that savings increases were simply reallocated from other savings mechanisms. Enhanced control over home-country savings does not affect remittances sent home by migrants.
Established in 2009, the US Household Finance Initiative (USHFI) leads IPA’s US research. Directed by researchers Jonathan Zinman (Dartmouth College) and Dean Karlan (Yale University), the initiative uses insights from behavioral economics to develop, rigorously evaluate, and scale cost-effective financial products and product innovations that help low- to moderate-income households lead healthier financial lives.
We conducted two matching grant experiments with an international development charity. The first and primary experiment tests a matching grant from the Bill and Melinda Gates Foundation (BMGF) compared to a matching grant from an anonymous donor. The second, auxiliary experiment, establishes that the matching grant from BMGF in this context does generate further donations compared to a control. We find that naming BMGF as the matching donor raises more money, both compared to an anonymous donor and compared to control. In a key result, we find that the effect persists after the matching period, and that the naming-BMGF effect is heterogeneous—largest for donors who previously gave to other poverty-oriented charities. Combining this with a survey of representative Americans that shows a correlation between giving to poverty charities and familiarity with the BMGF, we conclude that the matching gift here primarily works through a quality signal mechanism.
Theories abound for why individuals give to charity. We conduct a randomized field experiment with a Yale service club and find that the promise of public recognition increases giving. Some may claim that they give when offered public recognition in order to motivate others to give too, rather than for the more obvious expected private gain from increasing one’s social standing. To tease apart these two theories, we also conduct a laboratory experiment with undergraduates. Our evidence is not consistent with individuals giving primarily because of a desire to influence the gifts of others. We conclude that social image motivations are a central determinant of giving when gifts are publicly recognized.
Are minorities treated differently by the legal system? Systematic racial differences in case characteristics, many unobservable, make this a difficult question to answer directly. In this paper, we estimate whether judges differ from each other in how they sentence minorities, avoiding potential bias from unobservable case characteristics by exploiting the random assignment of cases to judges. We measure the between-judge variation in the difference in incarceration rates and sentence lengths between African-American and White defendants. We perform a Monte Carlo simulation in order to explicitly construct the appropriate counterfactual, where race does not influence judicial sentencing. In our data set, which includes felony cases from Cook County, Illinois, we find statistically significant between-judge variation in incarceration rates, although not in sentence lengths.