Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes†

Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes† AbstractDo natural disasters increase charitable giving or simply reallocate a fixed supply of donations? We study this question using Internal Revenue Service data in the context of deadly tornadoes. We find that among zip codes located in the same state but more than 20 miles away from a tornado’s path, donations by households increase by about $2 million per tornado fatality. We find no negative effects of tornado fatalities on donations to charities located in these zip codes. The results imply that giving in response to new needs need not come at the expense of other causes. (JEL D64, L31, Q54) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Review Insights American Economic Association

Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes†

Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes†

AER: Insights 2021, 3(3): 383–398 https://doi.org/10.1257/aeri.20200230 Is the Supply of Charitable Donations Fixed? Evidence from Deadly Tornadoes By Tatyana Deryugina and Benjamin M. Marx* Do natural disasters increase charitable giving or simply reallocate a fixed supply of donations? We study this question using Internal Revenue Service data in the context of deadly tornadoes. We find that among zip codes located in the same state but more than 20 miles away from a tornado’s path, donations by households increase by about $2 million per tornado fatality. We find no negative effects of tornado fatalities on donations to charities located in these zip codes. The results imply that giving in response to new needs need not come at the expense of other causes. (JEL D64, L31, Q54) Charitable donations are an important source of funding for public goods and redistribution. Overall, US charitable giving makes up about 2 percent of GDP (List 2011). But it is not well understood whether an exogenous shock to human need, such as a natural disaster , increases total giving or simply displaces donations that would have gone to other causes. Many laboratory experiments find that incentives However, the or opportunities to donate to one charity reduce giving to the others. laboratory setting may not be reflective of typical giving. Outside of the laboratory, credible causal estimates of displacement effects between causes are rare and gener - ally encompass a small share of charities or total donations. We estimate whether deadly tornadoes increase the total amount of charitable giving. We measure charitable giving using an annual panel zip-code-le of vel indi- vidual income tax data from the Internal Revenue Service (IRS), which report all income tax deductions claimed for donations to any registered charity in 2002– 2017. Only about 30 percent of households itemize deductions, and itemized dona- tions are disproportionately concentrated among...
Loading next page...
 
/lp/american-economic-association/is-the-supply-of-charitable-donations-fixed-evidence-from-deadly-aB7jZYUBDf

References (1)

  • Adena Maja (2020)

    2020

    WZB Working Paper SP

Publisher
American Economic Association
Copyright
Copyright © 2021 © American Economic Association
ISSN
2640-205X
eISSN
2640-2068
DOI
10.1257/aeri.20200230
Publisher site
See Article on Publisher Site

Abstract

AbstractDo natural disasters increase charitable giving or simply reallocate a fixed supply of donations? We study this question using Internal Revenue Service data in the context of deadly tornadoes. We find that among zip codes located in the same state but more than 20 miles away from a tornado’s path, donations by households increase by about $2 million per tornado fatality. We find no negative effects of tornado fatalities on donations to charities located in these zip codes. The results imply that giving in response to new needs need not come at the expense of other causes. (JEL D64, L31, Q54)

Journal

American Economic Review InsightsAmerican Economic Association

Published: Sep 1, 2021

There are no references for this article.