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Title:Charitable giving in the German welfare state: Fiscal incentives and crowding out PDF Logo
Authors:Bönke, Timm
Massarrat-Mashhadi, Nima
Sielaff, Christian
Issue Date:2010
Series/Report no.:School of Business & Economics Discussion Paper: Economics 2010/30
Abstract:Governmental activities in welfare states influence private charitable giving predominantly in two ways: (1) government spending on the provision of public goods may cause crowding out of private charitable contributions; and (2) tax incentives may boost private charitable giving. For a rich sample of German income tax returns, we estimate elasticities of charitable giving regarding tax incentives, income and governmental spending. Using censored quantile regression, we are able to derive results for different points of the underlying distribution of charitable giving. Assuming a world with impure altruism (Andreoni 1990), we find evidence for impurely altruistic giving behaviour. Taking crowding out into account, tax deductibility of charitable giving suffices to foster private giving to offset foregone tax revenues.
Subjects:charitable giving
crowding out
price and income elasticity
censored quantile regression
income tax return data
Document Type:Working Paper
Appears in Collections:Diskussionsbeiträge, FB Wirtschaftswissenschaft, FU Berlin

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