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Comments on: Charitable ignorance, part II http://www.tvhe.co.nz/2008/03/25/charitable-ignorance-part-ii/ The Visible Hand in Economics Thu, 27 Mar 2008 01:42:15 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: rauparaha http://www.tvhe.co.nz/2008/03/25/charitable-ignorance-part-ii/#comment-1136 Thu, 27 Mar 2008 01:42:15 +0000 http://tvhe.co.nz/?p=304#comment-1136 Indeed, there are a lot of potential explanations for why people wouldn’t give to charities. I don’t pretend to know much about the subject, but there’s certainly a lot of heterogeneity in people’s preferences across charities. I only sought to offer a model that might explain the rather counterintuitive results cited in the previous post: people would choose to give if they knew, but they choose not to know. I’m not sure this model really works to explain it, but I haven’t heard a good story from anywhere that sheds much light on it, unfortunately.

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By: Dismal Soyanz http://www.tvhe.co.nz/2008/03/25/charitable-ignorance-part-ii/#comment-1135 Wed, 26 Mar 2008 02:56:16 +0000 http://tvhe.co.nz/?p=304#comment-1135 Not sure if it really comes down to an informational asymmetry per se but the relative cost of obtaining that information. Most collectors wear bibs, have obvious signs on the “bucket” and possibly even a static display. Most times you can tell for whom they are collecting.

The question to my mind is the extent to which a potential donor will get a warm fuzzy. From my casual observations, Poppy Day and Breast Cancer appeals tend to get more passer-bys reaching for their wallet than Red Cross or Amnesty because they tug at the heart strings more. It is easier to avoid thinking about the hardships faced by people overseas but if your grandparents served in WW2 or your friend had a mastectomy then it hits home more. because of these intimate connections, they probably already know something about the causes. The time/opportunity cost it takes to fish out the gold coin is relatively low. Yet if its a new charity they know little about, they may ultimately believe that it is deserving of money but a) it is too remote and b) the cost incurred to obtain that information make it not worth for them (in terms of fuzzies) to stop.

I almost never give to street appeals. Not because I don’t believe in their causes but because I practice mental accounting. I set aside moeny for charities (my favs are World Vision and the Wellington Free Ambulance – *plug plug*) and that is where my donations go.

The discussion about donations brings to mind a debate I saw elsewhere about what altruism actually meant and whether it is truly altruism. Giving to charity gives the fuzzies so it is not altruistic – you are doing it to feel better. Chicken and the egg.

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