The economics of altruism

Question 1

Pure Altruism

Answer 1

Altruism is the behaviour observed, not motivation. Pure altruism is a wilingness to act in the consideration of others without the need of alterior motives, such as recognition or observability. If altruism is only pure, you recieve identicle benefit from support provided privately, by yourself, to support provided externally, by another. An individule i indifferent to the source of support, and when another gives an individule would give less through the process of crowding out.

Question 2

Crowding out

Answer 2

Crowding out is a process that occurs when altruism is pure, that is, when altruism occurs without alterior motives and an indifference to the source. When another group provides aid, such as government provision of charity, the overall need for aid decreases, and private provision falls. For example, if a government begins to pay for the provision of a public park, private donations may fall.

Question 3

Warm glow

Answer 3

Warm glow refers to the joy an individule receives as a result of giving a donation, a egosistic donation refering the pleasure of providing aid over the implications of the benefit. There is no “complete crowding out” with warm glow altruism, unlike with pure altruism.

Question 4

Social image v Self Image

Answer 4

Social image refers to how a person wants to be veiwed by others, such as wanting to be seen as charitable, which can be seen in campaigns like Movember where the visibility of the campaign aids the social image. This can also be seen in LAcetera and MAxis 2009 paper studying italian blood doations, which found that medals alone did not increase donations, but having the name in the paper did. Positive image is undermined by ulterior motivation.

Self image refers to how a person wants to veiw themselves.

Question 5

Social Norms

Answer 5

Social norms and expectations impact altruism, as they create a gyide for the anticipated levels of altruism. This can be seen in a study of Public Radio in America, Shang and Croson, where a feild experiment was conducted to explore how social norms surrounding donation size impacted donation. The hypothesis was that social information and norms would impact donations. The feil dexperiemnt included a control, callers donating without being told how much a prior donor donated, and callers being told different amounts from 70 to 300 dollars. They found that increases in the amount of money prior callers made, excluding the outlier of 300 dollars, led to an increase in donation.

Question 6

Reciprocity

Answer 6

Altruism in responce to a favor or assistance provided with the presumption of future benefit. For example, a study finds that people are more likely to make donations to a hostipital fter being treated at that very hostipal.

Question 7

Prosocial Behaviour

Answer 7

Definition. Prosocial behavior is voluntary, intentional behavior that results in benefits for another person. Such behavior is considered to be altruistic if it is motivated by a genuine desire to benefit another person, without any expectation of benefits to oneself. It is the oppostive of egoism.

Question 8

A Field Experiment in Charitable Contribution: The Impact of Social Information on the Voluntary Provision of Public Goods; Shang, Croson. 2009-20010, 1422-1239 (18 pages)

Answer 8

Hypothesis; social norms and expectations influence altruism.
Methodology; feild experiment with public radio, with a control where callers indicate how much they want to give and different treatmetns, where researchers indicate different amounts prior callers gave, from 75 to 300 dollars.
Results; social imformation increased average donation postively up to 180, falling at 300 the outlier.

Question 9

Economic Rewards to Motivate Blood Donations; Lacetera, Maxis, Slonon. 927-928 (1 page)

Answer 9

Hypothesis; financial incentive for blood donation increases supply.
Methodology; experiment, offered gift cards from 5 to 15 dollars to donors, advertised on flyers sent to randomised existing nad current donors.
Results; positive linear relationship between incentive and donations, more pronounced in new doners, leaked into control sugesting spillage. This means that reward does not decrease altruistic donation of blood. Possibly because reward not observed, framed as gifts of appreciation, donors sophisticate.d This may also be becuase it addresses fixed cost.

ALSO; increases to wait time, for new donors increases delay.

Question 10

From Lacetera & Macis (2009) “Social Image Concerns and
Pro-Social Behavior,” IZA Discussion Paper

Answer 10

Study of blood donors in Italy:
- Offered or not offered Medals if reached certain levels of donations
- If received medals, offered or not offered to put name in the paper
(social recognition) for the accomplishment
- Result: Offering medals alone had no effect on donations, but offering
medals in combination with having the name in the paper increased
donations significantly

Question 11

Titmuss (1970) The Gift Relationship: From Human Blood to Social Policy, New
York, Pantheon Books. Enormously Influential book on policy

Answer 11

• Argued that volunteer blood donations are a reflection of all that is good in
  humanity
• Argued compensating donors would undermine altruism motives, would both
  reduce donations and increase unhealthy and risky (bad) donations