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Giving to poverty relief charities: the impact of beliefs and misperceptions toward income redistribution in a real donation experiment

Giving to poverty relief charities: the impact of beliefs and misperceptions toward income... Many Americans hold erroneous beliefs regarding the level of inequality in the United States and the efforts by the federal government to alleviate poverty. In general, they overestimate the extent of poverty relief undertaken by government. Given that poverty relief programs are a public good and likely underprovided, overestimation of the level of income redistribution is likely to exacerbate this under-provision by reducing giving to private charities. This paper considers if this misperception affects giving to poverty-relief charities. We report a real-donation experiment investigating links between contributions to poverty-relief charities and perceptions of federal transfers to low income households. We also ask participants to self-identify political affiliation, religiosity, race, and gender. We find that donations to our poverty relief charities are inversely related to the perceived transfers made to the poorest quintile. Donations are approximately $0.20 less for each $1000 of perceived transfers. Interestingly, we find little correlation between giving and political beliefs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Social Choice and Welfare Springer Journals

Giving to poverty relief charities: the impact of beliefs and misperceptions toward income redistribution in a real donation experiment

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References (38)

Publisher
Springer Journals
Copyright
Copyright © 2017 by Springer-Verlag GmbH Germany
Subject
Economics; Economic Theory/Quantitative Economics/Mathematical Methods; Public Finance; International Political Economy; Game Theory, Economics, Social and Behav. Sciences; Social Policy
ISSN
0176-1714
eISSN
1432-217X
DOI
10.1007/s00355-017-1070-8
Publisher site
See Article on Publisher Site

Abstract

Many Americans hold erroneous beliefs regarding the level of inequality in the United States and the efforts by the federal government to alleviate poverty. In general, they overestimate the extent of poverty relief undertaken by government. Given that poverty relief programs are a public good and likely underprovided, overestimation of the level of income redistribution is likely to exacerbate this under-provision by reducing giving to private charities. This paper considers if this misperception affects giving to poverty-relief charities. We report a real-donation experiment investigating links between contributions to poverty-relief charities and perceptions of federal transfers to low income households. We also ask participants to self-identify political affiliation, religiosity, race, and gender. We find that donations to our poverty relief charities are inversely related to the perceived transfers made to the poorest quintile. Donations are approximately $0.20 less for each $1000 of perceived transfers. Interestingly, we find little correlation between giving and political beliefs.

Journal

Social Choice and WelfareSpringer Journals

Published: Jun 27, 2017

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