Agricultural & Resource Economics Working Papers
Permanent URI for this collectionhttp://hdl.handle.net/1903/19596
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Item The Impact of Taxes and Wasteful Government Spending on Giving(2020-05) Sheremeta, Roman M.; Uler, NeslihanWe examine how taxes impact charitable giving and how this relationship is affected by the degree of wasteful government spending. In our model, individuals make donations to charities knowing that the government collects a flat-rate tax on income (net of charitable donations) and redistributes part of the tax revenue. The rest of the tax revenue is wasted. The model predicts that a higher tax rate increases charitable donations. Surprisingly, the model shows that a higher degree of waste decreases donations (when the elasticity of marginal utility with respect to consumption is high enough). We test the model’s predictions using a laboratory experiment with actual donations to charities. We find that the tax rate has an insignificant effect on giving. The degree of waste, however, has a large, negative and highly significant effect on giving.Item When Income Depends on Performance and Luck: The Effects of Culture and Information on Giving(2017-01) Rey-Biel, Pedro; Sheremeta, Roman M.; Uler, NeslihanWe study how giving depends on income and luck, and how culture and information about the determinants of others’ income affect this relationship. Our data come from an experiment conducted in two countries, the US and Spain, that have different beliefs about how income inequality arises. We find that when individuals are informed about the determinants of income, there are no cross-cultural differences in giving. However, when uninformed, Americans give less than the Spanish, and this difference persists even after controlling for beliefs, personal characteristics, and values.