Transaction costs, the opportunity cost of time and procrastination in charitable giving

Stephen Knowles, Maroš Servátka*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

14 Citations (Scopus)

Abstract

We conduct a laboratory experiment to study whether giving people more time to donate to charity reduces donations. People may intend to donate, but because of the transaction costs of doing so, postpone making the payment until they are less busy, and having postponed making the donation once, keep postponing. We conjecture that transaction costs will have a greater effect on donations if the solicitation is received when the opportunity cost of time is high. We find evidence of a transaction cost reducing donations, with the size of this effect depending on the opportunity cost of time, but no statistically significant evidence that giving people more time to donate increases procrastination and thus reduces donations.

Original languageEnglish
Pages (from-to)54-63
Number of pages10
JournalJournal of Public Economics
Volume125
DOIs
Publication statusPublished - 1 May 2015

Keywords

  • Charitable giving
  • Dictator game
  • Inattention
  • Opportunity cost of time
  • Procrastination
  • Transaction costs

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