Stories | November 6, 2009

Sweet charity

If you’ve increased your donations to charity, the generosity of others might be part of the reason.

Research published in the latest Economic Journal suggests the amount of money other people give to charity has a big impact on our own giving.

United States academics Jen Shang and Rachel Croson write in their study about actual donations to a public radio station.

Keeping up with the donors
The pair found donations increased 12% on average - or the equivalent of US$13 - if people were told another donor had given US$300. The effect was strongest for new donors, who might be unsure how much to give. A year on, people who had been told of the US$300 donation were three-times more likely to renew membership to the public radio station than those who were not. The study is particularly relevant now, as people have been keeping a very close watch their budgets amid the global financial crisis.

And keeping up with the Joneses
An abundance of research over the years shows the actions of others have a huge influence on spending decisions - and can even encourage a person to buy a new car. The behavioural economics idea of "peer effects" - or keeping up with the Joneses - suggests shopping, saving, work ethics and other factors are influenced by those around us.

eZonomics team
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SpendingEconomicsShoppingPeer effectsCharity

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