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An Economic Analysis of Pro-Social Behavior : Decisions to Contribute Money and Time to Public Goods

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An Economic Analysis of Pro-Social Behavior : Decisions to Contribute Money and Time to Public Goods Zurich Open Repository and Archive University of Zurich Main Library Strickhofstrasse 39 CH-8057 Zurich www.zora.uzh.ch Year: 2004 An economic analysis of pro-social behavior : decisions to contribute money and time to public goods Meier, Stephan Abstract: Die Dissertation präsentiert eine empirische Analyse von Spendeverhalten von Zürcher Studieren- den zu zwei sozialen Fonds und von Freiwilligenarbeit in Deutschland. Die Resultate der Dissertation können in fünf Kernpunkten zusammengefasst werden: Erstens, Menschen sind in bestimmten, anony- men Entscheidungssituation bereit, zu einem öffentlichen Gut beizutragen. Mehr als 65 Prozent der Studierenden der Universität Zürich zahlen in beide sozialen Fonds ein. Zweitens, soziale Vergleiche sind für pro-soziales Verhalten entscheidend. In einem Feldexperiment, in welchem exogen die Erwartungen der anderen variiert wurden, kann nachgewiesen werden, dass das Verhalten der Umgebung das eigene Verhalten beeinflusst: Menschen sind eher bereit, zu einem öffentlichen Gut beizutragen, wenn diesandere auch tun. Drittens, in einem zweiten Feldexperiment wurde die Spende von gewissen Personen von einer anonymen Institution erhöht. Die entsprechenden Studierenden reagierten mit einer erhöhten Spende- bereitschaft. Viertens, es gibt systematische Unterschiede im Spendenverhalten zwischen Ökonomen und Nichtökonomen, diese Unterschiede haben aber nichts mit der Lehre der Ökonomie zu tun. Ökonomen sind bereits am Anfang des Studiums weniger bereit, in die beiden sozialen Fonds einzuzahlen. Fün- ftens, basierend auf dem deutschen Panel empirisch, wird gezeigt, dass Spenden und Freiwilligenarbeit machen glücklich. Um die Kausalität zu klären, ob Freiwilligenarbeit glücklicher macht oder ob glück- lichere Menschen eher freiwillig arbeiten, wird in der Dissertation auf die Wiedervereinigung als exogenen Schock zurückgegriffen. Der partielle Zusammenbruch der Infrastruktur für Freiwilligenarbeit erlaubt es empirisch zu zeigen, dass tatsächlich freiwilliges Engagement einen direkten Nutzen in Form von sub- jektivem Wohlbefinden bewirkt. The dissertation analyses empirically contributions of money andtime to public goods. The empirical analysis is based on contributions of students to two social funds at the University of Zurich and on patterns of volunteering in Germany. The dissertation points out five main results: First, people are willing to contribute to a public good even in an anonymous decision situation. More than 65 percent of the student population is prepared to donate money to the two social funds. Sec- ond, people’s pro-social behavior is influenced by the behavior of their reference group. The dissertation shows based on a field experiment that an exogenous variation in the average group behavior influences subject’s behavior. People’s willingness to behave pro-socially increases if others do so as well. Third, pro-social behavior is price sensitive. In a second field experiment, people’s donations were matched by a third party. A higher matching resulted in an increased willingness to contribute to the two social funds. Fourth, economists are on average less likely to behave pro-socially than non- economists. The difference is, however, due to a selection process of ’selfish’ people into economics. Training ineconomics does not increase people’s selfishness. The dissertation therefore rejects the indoctrination hypothesis. Fifth, pro-social behavior increases people’s subjective well-being. Based on a natural experiment in East Germany, the empirical results shows that an exogenous loss of the opportunity to volunteer decreases people’s happiness level. Posted at the Zurich Open Repository and Archive, University of Zurich ZORA URL: https://doi.org/10.5167/uzh-163253 Dissertation Published Version Originally published at: Meier, Stephan. An economic analysis of pro-social behavior : decisions to contribute money and time to public goods. 2004, University of Zurich, Faculty of Economics. 2 An Economic Analysis of Pro-Social Behavior Decisions to Contribute Money and Time to Public Goods DISSERTATION der Wirtschaftswissenschaftlichen Fakultät der Universität Zürich zur Erlangung der Würde eines Doktors der Ökonomie vorgelegt von Stephan Meier von Basel/BS genehmigt auf Antrag von Prof. Dr. Dr. h.c. mult. Bruno S. Frey Prof. Dr. Simon Gächter Die Wirtschaftswissenschaftliche Fakultät der Universität Zürich gestattet hierdurch die Drucklegung der vorliegenden Dissertation, ohne damit zu den darin ausgesprochenen Anschauungen Stellung zu nehmen. Zürich, den 23. Juni 2004 Der Dekan: Prof. Dr. H. P. Wehrli Table of Contents Preface ........................................................................................................................iv Chapter I: Introduction .................................................................................................1 Part A: Theoretical Considerations Chapter II: A Survey of Economic Theories on Pro-Social Behavior ...........................8 1 Behavior Beyond Self-Interest.........................................................................................................8 2 Theories Based on ‘Extended’ Self-Interest ..................................................................................13 2.1 Selective Incentives ...............................................................................................................13 2.2 Incomplete Information ..........................................................................................................15 3 Theories Beyond Self-Interest .......................................................................................................16 3.1 Pro-Social Preferences..........................................................................................................17 3.1.1 Pure Altruism ...............................................................................................................17 3.1.2 Impure Altruism............................................................................................................19 3.1.3 Inequality Aversion ......................................................................................................20 3.2 Reciprocity and Social Comparison.......................................................................................20 3.3 Institutional Environment .......................................................................................................25 3.4 Discriminating Between Theories of Pro-Social Behavior .....................................................30 4 Monetary Incentives and Pro-Social Behavior ..............................................................................32 4.1 Relative Prices of Pro-Social Behavior ..................................................................................33 4.2 Motivational Crowding Effect .................................................................................................35 5 Heterogeneity in Individuals ..........................................................................................................39 6 A Note on Utility and Pro-Social Behavior.....................................................................................41 6.1 Why Should Economists Take Utility Into Account?..............................................................41 6.2 How Can Utility Be Measured?..............................................................................................43 6.3 How Does Pro-Social Behavior Affect Happiness? ...............................................................43 6.3.1 Inequality and Happiness ............................................................................................43 6.3.2 Pro-Social Behavior and Happiness............................................................................45 7 Concluding Remarks and Open Questions ...................................................................................46 i Part B: Empirical Analysis Chapter III: Pro-Social Behavior in a Natural Laboratory ..........................................51 1 Data Set on Contributions to Two Social Funds at University of Zurich........................................52 1.1 Decision Setting .....................................................................................................................52 1.2 Characteristics of the Data Set ..............................................................................................54 2 General Pattern of Pro-Social Behavior: Descriptive Analysis......................................................57 2.1 Level of Contribution ..............................................................................................................57 2.2 Repetition...............................................................................................................................59 2.3 Influence of Institutional Conditions on Pro-Social Behavior.................................................62 2.3.1 The Way of Asking.......................................................................................................63 2.3.2 Group Identification .....................................................................................................65 2.4 Heterogeneity in Pro-Social Behavior....................................................................................66 3 Multivariate Analysis: An Excursion into Econometrics.................................................................68 3.1 Testing for Third Factors: Probit Regressions
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