Impact of Rebates and Refunds on Contributions to Threshold Public Goods: Evidence from a Field Experiment
Matthew Donazzan, Nisvan Erkal, Boon Han Koh
Southern Economic Journal | WILEY | Published : 2016
We investigate the impact of rebates and refunds on contributions to threshold public goods using evidence from a field experiment conducted in conjunction with an Australian charity, Life Goes On. We find that offering rebates and refunds has a significant positive impact on both participation and average donations in the absence of seed money. Our results suggest that offering rebates and refunds, and the existence of seed money may, to some extent, play substitute roles in encouraging giving behavior. Seed money has a significant positive effect on participation only. Seed money’s impact on average donations may be mitigated by a threshold effect.
We thank Andrew Clarke, Mick Coelli, Rachel Croson, Robert Dixon, Joe Hirschberg, Andreas Leibbrandt, Flavio Menezes, Nikos Nikiforakis, Robert Slonim, Tom Wilkening, the Editor, two anonymous reviewers, and participants at the Asia-Pacific ESA Conference (2010) for valuable comments. We are grateful to the Department of Economics at the University of Melbourne and the Australian Research Council for their financial support. Finally, we owe special thanks to Joel Nathan and Jo Natoli at Life Goes On for their help and patience throughout this project.