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Modelling charitable donations: A latent class panel approach

Brown, S., Harris , M.N. and Taylor, K. (2010) Modelling charitable donations: A latent class panel approach. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368

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Abstract

We apply a latent class tobit framework to the analysis of charitable donations at the household level where the latent class aspect of the model splits households into two groups, which we subsequently interpret as "low" donators and "high" donators. Then the tobit part of the model explores the determinants of the amount donated by each household conditional on being in that class. We consider both total donations and also separately religious donations. Our findings, which are based on US panel data, suggest that price and labour income elasticities differ substantially across the two classes. The inverse price effect is most pronounced for the "low" donators group for both total and religious donations. The labour income elasticity switches direction of influence upon charitable donations across the two latent classes with a negative influence for the "high" donators group and a positive influence for the "low" donators group, for the case of total donations to charity, a pattern which is reversed in the case of solely religious donations.

Item Type: Monograph (Working Paper)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Keywords: Charity, Donations, Latent Class, Panel Data, Tobit
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Repository Officer
Date Deposited: 07 Oct 2010 11:33
Last Modified: 08 Feb 2013 17:07
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: Sheffield Economic Research Paper Series 2010017
URI: http://eprints.whiterose.ac.uk/id/eprint/11253

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