Freakanomics Auction On Ebay For Charity
Have you guys seen this auction? http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItemssPageName=ADME:L:LCA:US:31item=6581100754 Tim Hartford claims to have the first signed copy of the book 'Freakanomics'. Prof. Steven D. Levitt seems to agree and has pledged to match the winning bid as a donation to a charity called Smile Train. Someone has posted a comment on Prof. Levitt's blog asking This auction seems like a win-win: Tim Harford gets to promote his fascinating new book and Smile Train benefits from the donation—now even more so that Steve said he would match the donation...There's one thing, though, that I have never understood about matching donation offers. Why wouldn't Smile Train use its own money to buy the book off ebay? Aside from some questions worthy of the Ethicist, they could double their money in a week and get a couple books out of the deal. (Perhaps they may want to donate the books anonymously afterwards…) Anybody have any comments as to why this is not the chosen strategy of charities when faced with the ability to manipulate matching donations? -- Chris Silvey [EMAIL PROTECTED]
Re: charity and time preference
I'm surprised that everyone who has responded to my post has defended the conventional wisdom on charity giving. But surely one should either borrow money to do a life time worth of giving right away, or save and do all charity in one's will, or otherwise concentrate all charity giving to a single moment in time. Given Robin's comments, I'm not sure anymore when is actually the best time to do the giving, but it cannot be optimal to do what many people actually do, which is to give a percentage of one's income to charity as one earns it. This point is very similar to the one Steven Landsburg made in one of his Slate articles, http://slate.msn.com/id/2034/, which was that a donor should give all of his contributions to one charity, and not spread them among several. The logic is almost exactly the same.
Re: charity and time preference
--- Wei Dai [EMAIL PROTECTED] wrote: a donor should give all of his contributions to one charity, and not spread them among several. The logic is almost exactly the same. Likewise, a parent with several children should confine his spending to one child and let the rest die off. The logic is exactly the same. Fred Foldvary = [EMAIL PROTECTED]
Re: charity and time preference
--- Wei Dai [EMAIL PROTECTED] wrote: ... surely one should either borrow money to do a life time worth of giving right away, or save and do all charity in one's will, or otherwise concentrate all charity giving to a single moment in time. That should generalize to raising children; when one's child is born, one should borrow enough money to create a fund that will pay for all the child's expenses until his age of maturity, rather than pay for the child's expenses every year out of one's income. Yet nobody does this! Fred Foldvary = [EMAIL PROTECTED]
Re: Charity
On Wed, 4 Jun 2003, Jason DeBacker wrote: Is it not possible that there is some common goods problem? People not helping b/c they think others will? The general welfare of others is a public good afterall, right?- (non-rival, non-excludable) Exceedingly implausible in the Africa case. Only plausible if the amount of potential help exceeds potential need. Story works for why people don't give to the bum looking for money on the street; doesn't explain why people don't give to Africa.
Re: Charity
The public good story is also inconsistent with public opinion polls which show that the public always think the foreign aid budget is too *large*. If the public good story were true people would be clamoring for collective action. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
Re: Charity
I would personally lean back on the monitoring problems -- for a particular save the child fund, three of my friends saved the same child, same photo, bio, everything. And I would like to say it was the Shriner's that got in trouble not so long ago for having rather lude behavior with paid tabletop dancers at one of their charity banquets, and are in trouble for mistreatment of their circus animals besides. (Needless to say, they have very high administrative costs.) At 03:44 PM 6/5/2003 -0400, you wrote: These are two separate things. We can imagine the public good of a functional Africa that will suffer from the traditional public goods problems. But, I don't think that you can say the same for the plethora of save the children type charities that assure you that a child's life will be saved for your $20/mth. The benefits from that are largely internalized -- the donor gets to feel better about himself for having saved the life, etc. The contribution to any public good is next to nil -- the continent remains disfunctional and there is still rampant starvation and war. But, the donor has personally made one person better off who wouldn't likely have been made better off absent the contribution. Don't think we can invoke public goods here.
Re: charity and time preference
On 6/5/03 11:22 PM, Wei Dai [EMAIL PROTECTED] wrote: Suppose I have some money that I don't want to spend, and I'm sure I'll never want to spend it. Should I give it to charity now, or put it in an index fund and bequeath it to charity in my will? Here's my argument in favor of charitable procrastination. The typical recipient of charity does not have access to the kind of investment opportunites (e.g., low cost U.S. mutual funds) that I have, and his other investment opportunities usually have a lower (perhaps even negative) rate of return. Charitable organizations are legally forced to spend a certain percentage of their assets per year, so they can't invest the money indefinitely either. By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument? Ignoring the utility of the money to the target charity today, e.g., food or medicine to live, the money value of the PV should also be reduced by the tax benefit you have forgone by not making the donation today.
Re: charity and time preference
Quoting Wei Dai [EMAIL PROTECTED]: Suppose I have some money that I don't want to spend, and I'm sure I'll never want to spend it. Should I give it to charity now, or put it in an index fund and bequeath it to charity in my will? Here's my argument in favor of charitable procrastination. The typical recipient of charity does not have access to the kind of investment opportunites (e.g., low cost U.S. mutual funds) that I have, and his other investment opportunities usually have a lower (perhaps even negative) rate of return. Charitable organizations are legally forced to spend a certain percentage of their assets per year, so they can't invest the money indefinitely either. By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument? Besides the obvious one about present needs going unfullfilled, there is this: Small charities may not have access to the investment options you do, this is true. But they do grow oranizationally, and withholding small but signifigant present contributions in favor of larger but later contributions can retard that growth potential. An example of this would be the use of a moderate-sized donation to buy advertising for volunteers or to plow back into a fundraising event, procurement of phone service or website, or some other signifigant organizational step. In the most extreme scenario, if all donors invested their future donations and withheld current donations, the organization would starve for lack of current funds and would not be in existance to *recieve* the more generous future gifts. Speaking as the director of a very small but very active charity, I can tell you that we tend to have *quite high* time preferences. Possibly some of that is bleedover from the personality of the founder (that would be gotta-have-it- now me:) but I honestly believe that for most small groups working in conditions where the need is always in far excess of resources available, this time preference exists. The situation with respect to large charitable organizations may differ signifigantly for several reasons, but I don't feel as qualified to discuss that. So go buy some raffle tickets now as my signature 'asks' ;-) -- Susan Hogarth Buy some raffle tickets or else! http://www.tribeagles.org/raffle/
Re: charity and time preference
Shouldn't we also worry about how poor people are now relative to how they'll be in the future? Today's poor are much better off than the poor from a century ago; presumably the poor a century from now will be less deserving than those of the present day? On Fri, 6 Jun 2003, Richard L. white wrote: On 6/5/03 11:22 PM, Wei Dai [EMAIL PROTECTED] wrote: Suppose I have some money that I don't want to spend, and I'm sure I'll never want to spend it. Should I give it to charity now, or put it in an index fund and bequeath it to charity in my will? Here's my argument in favor of charitable procrastination. The typical recipient of charity does not have access to the kind of investment opportunites (e.g., low cost U.S. mutual funds) that I have, and his other investment opportunities usually have a lower (perhaps even negative) rate of return. Charitable organizations are legally forced to spend a certain percentage of their assets per year, so they can't invest the money indefinitely either. By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument? Ignoring the utility of the money to the target charity today, e.g., food or medicine to live, the money value of the PV should also be reduced by the tax benefit you have forgone by not making the donation today.
Re: charity and time preference
On Fri, Jun 06, 2003 at 09:29:34AM -0400, Richard L. white wrote: Ignoring the utility of the money to the target charity today, e.g., food or medicine to live, But the money will have a greater utility tomorrow (since there will be more of it). Unless you think there will be less needy people in the future? the money value of the PV should also be reduced by the tax benefit you have forgone by not making the donation today. Well, that's true. But over the long run the PV is still greater if I hold on to the money. Also, if my argument is correct, government policy should be changed to take it into account. For example, one should be able to obtain tax benefits for putting money into an individual charity account, similar to the way IRAs work.
Re: charity and time preference
On Fri, Jun 06, 2003 at 12:25:11PM -0400, Robin Hanson wrote: Typical charity recipients also do not have access to borrowing opportunities that are as efficient as the ones available to you. So yes you could help them by delaying charity to people who would like to save, and borrowing money yourself to give money to people who would like to borrow (and then not giving them as much later). But unless you have a way to tell which charity recipients fall into which class, it is hard to see how to help them overall. Good point. There is a way to tell which recipients fall into which class though. Just ask them. That is, when giving to a recipient, instead of giving a bundle of cash, have him design an income stream for himself that has the same present value (to the donor) as the bundle of cash and give him that instead. This might increase transactions costs significantly, however. So I wonder if there is a way to tell whether on average charity recipients would rather borrow or save. Could someone do a study where you pick a random sample of charity recipients, have them design income streams for themselves (and have a trustworthy organization commit to giving them the income streams so they have proper incentives to report accurately) and then average out the results? This still isn't quite right, because it ignores future generations. Clearly a potential charity recipient who hasn't been born yet would prefer that I delay giving to charity, but the study won't be able to survey them, so the result will be biased towards giving too early. How to solve this problem?
Re: charity and time preference
Re: greater utility tomorrow argument: then taken to the extreme, your fund should not go to charity when you die but continue to grow until mankind can realistically forecast the end of the world at which point the fund (now an enormous asset) can be directed to improve the lives the least well-off of the last citizens of the world. My real criticism is the implicit notion that the future value of utility (because of the inside buildup of your bequest) is greater than the present value of that bequest. On 6/6/03 12:49 PM, Wei Dai [EMAIL PROTECTED] wrote: On Fri, Jun 06, 2003 at 09:29:34AM -0400, Richard L. white wrote: Ignoring the utility of the money to the target charity today, e.g., food or medicine to live, But the money will have a greater utility tomorrow (since there will be more of it). Unless you think there will be less needy people in the future? the money value of the PV should also be reduced by the tax benefit you have forgone by not making the donation today. Well, that's true. But over the long run the PV is still greater if I hold on to the money. Also, if my argument is correct, government policy should be changed to take it into account. For example, one should be able to obtain tax benefits for putting money into an individual charity account, similar to the way IRAs work.
Re: charity and time preference
Sure, the flaw is that this argument would imply that you hold the money forever. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
Re: charity and time preference
On Fri, Jun 06, 2003 at 12:05:01PM -0400, Eric Crampton wrote: Shouldn't we also worry about how poor people are now relative to how they'll be in the future? Today's poor are much better off than the poor from a century ago; presumably the poor a century from now will be less deserving than those of the present day? Doesn't that apply to the poor person's financial decisions too? If you're right, he should think that he or his children will be much better off in a century, so why should he save today?
Re: charity and time preference
On Fri, Jun 06, 2003 at 11:49:15AM -0400, Susan Hogarth wrote: Speaking as the director of a very small but very active charity, I can tell you that we tend to have *quite high* time preferences. Possibly some of that is bleedover from the personality of the founder (that would be gotta-have-it- now me:) but I honestly believe that for most small groups working in conditions where the need is always in far excess of resources available, this time preference exists. My original post was more about charitable giving targeted at human beings not animals, so I was talking about the time preferences of the end recipient rather than of the charitable organization. But since you bring it up... Do you prefer to rescue two beagles ten years from now, or one beagle today? Now I realize that your time preference for funding does not directly correspond to your time preference for the rescue of beagles, because you're competing with other charities (i.e., if you don't get the money now some other charity might get it instead). But the incentives are more straightforward for the donor. If he prefers the former he should hold on to the money and give it to a beagle rescue organization ten years from now (assuming he expects a 100% return on his ten-year investment).
Re: charity and time preference
Here's a quandry -- Since the more abject human misery there is, the more varied, specialized, and likely relatively cheaper (due to variety, breadth of the distribution of misery, etc) types of charity available for consumption, under what conditions are you willing to put up a side payment to increase it? In seriousness, it would seem to me that many cases of charity involve extremely high returns (above investment) in terms of future cost savings for the recipients or those sympathetic to the cause -- look to the preservation of eastern art by Western sources or disease prevention. Examples and cliches abound (Teach a man to fish... Once of prevention... and on). At 04:43 PM 6/6/2003 -0400, you wrote: On Fri, Jun 06, 2003 at 11:49:15AM -0400, Susan Hogarth wrote: Speaking as the director of a very small but very active charity, I can tell you that we tend to have *quite high* time preferences. Possibly some of that is bleedover from the personality of the founder (that would be gotta-have-it- now me:) but I honestly believe that for most small groups working in conditions where the need is always in far excess of resources available, this time preference exists. My original post was more about charitable giving targeted at human beings not animals, so I was talking about the time preferences of the end recipient rather than of the charitable organization. But since you bring it up... Do you prefer to rescue two beagles ten years from now, or one beagle today? Now I realize that your time preference for funding does not directly correspond to your time preference for the rescue of beagles, because you're competing with other charities (i.e., if you don't get the money now some other charity might get it instead). But the incentives are more straightforward for the donor. If he prefers the former he should hold on to the money and give it to a beagle rescue organization ten years from now (assuming he expects a 100% return on his ten-year investment).
Re: charity and time preference
--- Wei Dai [EMAIL PROTECTED] wrote: By holding on to my money, I'm actually increasing the present value of the gift from the perspective of the recipient. Can anyone find a flaw in this argument? If the discount rate used for present value equals the interest rate of the investment, then the amount of funds today equals the present value. Some charities have an urgent need at the present, such as earthquake aid or feeeding people in a famine. If one gives later, it would be too late. Fred Foldvary = [EMAIL PROTECTED]
Re: Charity
On Tue, 3 Jun 2003, Jason DeBacker wrote: -- I listed as one possibility that people are ashamed to admit their preferences. I feel the same way as you do, but I am not sure all people think like that. Some probably actually care about saving lives instead of having HBO, but for some reason do not act on that preference- I don't know why, though. Expressive preferences diverge from revealed preferences. When the cost of having lofty ideals is nil, people will have them. When it comes down to the choice of saving a life versus having HBO, people pick HBO. Eric
Re: Charity
I think this is like example from economics textbooks: a) We have common goods problem. Even if you will not help save these child's, may be someone else will. You cannot help everybody. Of course this is for usual people, not superrich. For example, I heard something like Bill Gates paying for anti malaria efforts (sprayed anti moskito nets) more ore less single-handedly. b) We have information problem. Charities have problem checking that their efforts brought results, have problem showing this to donors, and donors have every reason not to believe them. Main problem is that recipients of help are very far away from donors. This contrasts sharply with the case when you, for example, buy DirectTV programming and can look ot the same day. c) People, reasonably, think that they should first look after themselves. That is what Adam Smith invisible hand expects from them. This is may be less a case for religious people who give to charities to pay back for some sins, but generally we can expect that people think more (and pay more) about themselves or their family. Mikhail Gambarian Jason DeBacker wrote: Why dont more people give more money to charity? If you asked someone if they would rather see $50 used to feed a child for a month or on another month cable TV (or whatever), I cant imagine someone not saying that the child should be fed. But almost no one gives $50 a month to charity and many give that to watch cable television (or spend it on other frivolous purchases). Why does this happen? A few possible reasons: - The history of charitable money getting into the wrong hands has scared people from donating. - There is some kind of market failure (a la the story of the woman being attacked while the whole block watched and no one stopping it or calling the police). - People really dont care about helping someone else, but are ashamed to admit that. - People just dont think about donating. Regards, Jason DeBacker
Re: Charity
Eric has me as being nicer than I actually am. I would give up a leg to cure AIDS. For SARS I would take a kick in the leg. Alex -- Alexander Tabarrok Department of Economics, MSN 1D3 George Mason University Fairfax, VA, 22030 Tel. 703-993-2314 Web Page: http://mason.gmu.edu/~atabarro/ and Director of Research The Independent Institute 100 Swan Way Oakland, CA, 94621 Tel. 510-632-1366
Re: Charity
Is it not possible that there is some common goods problem? People not helping b/c they think others will? The general welfare of others is a public good afterall, right?- (non-rival, non-excludable) I think it is reasonable to say that there is not an efficient level of charity (at least in the third world charity market), and if the answer is that people don't really care to give more, then you are saying it is efficient. I can envision this being the case, but it is hard to imagine. Jason - Original Message - From: Bryan Caplan [EMAIL PROTECTED] To: [EMAIL PROTECTED] Sent: Wednesday, June 04, 2003 8:26 AM Subject: Re: Charity Jason DeBacker wrote: And the answer is: - People really dont care about helping someone else, but are ashamed to admit that. How could it be anything else? -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] The game of just supposing Is the sweetest game I know... And if the things we dream about Don't happen to be so, That's just an unimportant technicality. Jerome Kern and Oscar Hammerstein, *Showboat*
Re: Charity
This reminds me of an old Monty Python sketch that had a line in which the game-show host offered the contestant a choice: Would you like the nice gift package, or a hit on the head? To which the game-show contestant replied: Ah, I'll take the hit on the head! (or I'll take the 'it on the 'ead!) David G In a message dated 6/4/03 3:01:57 PM, [EMAIL PROTECTED] writes: Eric has me as being nicer than I actually am. I would give up a leg to cure AIDS. For SARS I would take a kick in the leg. Alex
Re: Charity
I remember a discussion with Bryan, where he claimed that the average proportion of income donated to charity is about 1% or 2%. Say somebody makes $30K, that $300/year. I can easily imagine a religious person giving a few bucks a week to church ($2x52= $110) plus maybe some extra during fund raising drives at church and work ($200 total). So people are willing to give about $30 month to charity. Is that low or high? I'd say it's probably ok, most people can't afford to give much anyway, with mortages, student loans, children, etc. Only the wealthy could give thousands and still pay the phone bill. Fabio On Tue, 3 Jun 2003, Jason DeBacker wrote: Why don’t more people give more money to charity? If you asked someone if they would rather see $50 used to feed a child for a month or on another month cable TV (or whatever), I can’t imagine someone not saying that the child should be fed. But almost no one gives $50 a month to charity and many give that to watch cable television (or spend it on other “frivolous” purchases). Why does this happen? A few possible reasons: - The history of charitable money getting into the wrong hands has scared people from donating. - There is some kind of market failure (a la the story of the woman being attacked while the whole block watched and no one stopping it or calling the police). - People really don’t care about helping someone else, but are ashamed to admit that. - People just don’t think about donating. Regards, Jason DeBacker
Re: Charity
People give as much as they care to. To the extent that they give less than they'd claim they'd want to see given, it's because the former is a revealed preference and the latter is an expressive preference. There's only failure involved inasmuch as we let things be determined by expressive preferences (at the ballot box) rather than revealed preferences. Your imagination is clearly too limited if you can't imagine anyone who would baldly state that they prefer the cable TV. I certainly prefer spending my $67/mth on Dish Network top 100 plus HBOs plus locals plus built-in TIVO to sending the money off to save an arbitrarily large number of children in a foreign country. If I didn't have that rank ordering of preferences, I'd get rid of the Dish. Eric On Tue, 3 Jun 2003, Jason DeBacker wrote: Why don’t more people give more money to charity? If you asked someone if they would rather see $50 used to feed a child for a month or on another month cable TV (or whatever), I can’t imagine someone not saying that the child should be fed. But almost no one gives $50 a month to charity and many give that to watch cable television (or spend it on other “frivolous” purchases). Why does this happen? A few possible reasons: - The history of charitable money getting into the wrong hands has scared people from donating. - There is some kind of market failure (a la the story of the woman being attacked while the whole block watched and no one stopping it or calling the police). - People really don’t care about helping someone else, but are ashamed to admit that. - People just don’t think about donating. Regards, Jason DeBacker
Re: Charity
--- Jason DeBacker [EMAIL PROTECTED] wrote: Why don't more people give more money to charity? - The history of charitable money getting into the wrong hands has scared people from donating. Yes, and also the fact that in many charities, most, even up to 80 percent or more, of the donations go to fundraising and expenses. - There is some kind of market failure. But we don't have a pure market, so there may be government failure mixed into this. - People really don't care about helping someone else, but are ashamed to admit that. But there is a great deal of charity giving as well as much volunteer time. Social entrepreneurs can stir up sympathy for a cause. There is also a great lack of information about the various charity options. For example, my favorite charity is the Pygmy Fund, which is helping the Pygmy people in the Congo (Zaire) to survive amidst the war and disease in the area. It is a small organization that hardly anyone knows about. I donate to it because I know the head man (Jean-Pierre Hallet) and am confident that all of my donation is going to the cause rather than to fundraising and plush offices. It seems to me there is an entrepreneurial opportunity to provide a comprehensive Guide to Charities that would list them and their expenses. Fred Foldvary = [EMAIL PROTECTED]
Re: Charity
Fabio, I dont know it 1 or 2% is low or high either. I was mostly considering at the margin, people would seem to support more charity, yet dont. Sure, few could give thousands, but many could give up a nice restaurant dinner, a couple rental movies, or some such thing each month, and would make a large difference to someone in a third world country. This fact is not mentioned often and acted upon even less often, though I think people would admit that it is worthwhile. Fred Foldvary wrote: It seems to me there is an entrepreneurial opportunity to provide a comprehensive Guide to Charities that would list them and their expenses. I was actually thinking about this! Jason
Re: Charity
Fabio Rojas wrote: somebody makes $30K [a year] ... willing to give about $30 month to charity. Is that low or high? I'd say it's probably ok, most people can't afford to give much anyway, with mortages, student loans, children, etc. Only the wealthy could give thousands and still pay the phone bill. Huh? This can't possibly be right. People could choose a cheaper mortgage, fewer children, etc. In a world with a median income of ~$3000, someone who makes ten times that much surely can choose to spend thousands on charity if they want to. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Charity
Eric Crampton wrote: Your imagination is clearly too limited if you can't imagine anyone who would baldly state that they prefer the cable TV. I certainly prefer spending my $67/mth on Dish Network top 100 plus HBOs plus locals plus built-in TIVO to sending the money off to save an arbitrarily large number of children in a foreign country. If I didn't have that rank ordering of preferences, I'd get rid of the Dish. -- I listed as one possibility that people are ashamed to admit their preferences. I feel the same way as you do, but I am not sure all people think like that. Some probably actually care about saving lives instead of having HBO, but for some reason do not act on that preference- I don't know why, though. Jason Jason
Re: Charity and Races as Complements
Alex Tabarrok wrote: Races are public goods?! How do I benefit if some other people run a race with each other? Is this just due to some externality that healthy people produce in general? Recall that the definition of public goods is not a good that is good for the public! :) The definition is in terms of non-rivalry and non- excludability of which non-rivalry is the more critical component. My point was simply that the output produced by someone running a race is non-rivalrous. Thus, the charitable racer can collect donations from any number of people for running the same race. People could organize a race, and solicit donations to support the race. People can also run some other charity, like for a cancer, and solicit donations to support that charity. The question is why these two charities are so often combined. Many people would not give money to someone soliciting for a race by itself, or for someone soliciting for a cancer charity by itself, but they do give money to someone soliciting for a cancer run. Why the extra willingness to donate to this combined solicitation? Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
RE: Charity and Races as Complements
From: Robin Hanson [mailto:[EMAIL PROTECTED]] People can also run some other charity, like for a cancer, and solicit donations to support that charity. The question is why these two charities are so often combined. Many people would not give money to someone soliciting for a race by itself, or for someone soliciting for a cancer charity by itself, but they do give money to someone soliciting for a cancer run. Why the extra willingness to donate to this combined solicitation? Maybe it's a function of the product of the guilt? They don't give cancer money, but feel a bit guilty (say 3). They don't exercise themselves, but feel a bit guilty (say 4). Total guilt they avoid by donating: 3*4 (Maybe quantifying is silly but the combinatorial aspect is valid) Tom Grey
Re: Charity and Races as Complements
In a message dated 9/9/02 12:05:12 AM, [EMAIL PROTECTED] writes: Being willing to run 10K is the opposite, so to speak. If D.L. is willing to run until he pukes, then the cause must be important to him and I'm more willing to give a few minutes to hear his plea and possibly give money. Just for the record, I have never to my recollection run til I puked. I have run once or twice until I came within seconds of passing out, although neither time for charity. I wonder, would I have gotten more praise for running til I nearly passed out if I'd done it for charity? As it was I merely heard about the foolishness of running in the mid-summer afternoon humidity of Iowa. Of course you have to take that with a grain of salt, as Iowa consistently has one of the highest per capital rates of obesity in the country. I seem to be running off topic here ... ;) D.L.
Re: Charity and Races as Complements
Fabio wrote: why are these activities combined so often? Symbiosis? Charities need publicity, and staging a big race in the middle of town is one way to do it. I take it for granted that charities do whatever will get them them most donations - so the question has to be about participants, runners and donors. Athletes want fame and glory, and winning a race with a brand name attached (American Heart Association) helps them get invitations to even better races. Why would such a brand name signal they are good runners, any more than any other possible organizer of the race? Why not Safeway races, or 7-UP races? ... The participants also get to socialize with other healthy people with disposable income and who share similar values. So both sides benefit. OK, this suggests that health, income, and values are complements as features of people you socialize with. Why these as opposed to any other set of three positive features (such as humor, intelligence, residence, etc.)? Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Charity and Races as Complements
john hull [EMAIL PROTECTED] wrote: It allows the participants to demonstrate their commitment to the cause when soliciting money. ... If D.L. is willing to run until he pukes, then the cause must be important to him and I'm more willing to give a few minutes to hear his plea and possibly give money. So why not mow lawns for donations, you ask? ... when people are compensated for something they tend to enjoy it less. ... If you mowed lawns for breast cancer, you'd be putting lawn care professionals out of work and creating even more charity cases. Putting professionals out of work?! This is a confused about economics explanation. I admit people are often confused, but we should also consider more rational explanations. They could spend the same effort they spent training for the race and running it doing their usual kind of job, and then impress you with the dollar amount of money they donated to the charity. If I donated $10,000, couldn't you donate a few dollars? Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
RE: Charity and Races as Complements
From: Robin Hanson [mailto:[EMAIL PROTECTED]] Fabio wrote: ... The participants also get to socialize with other healthy people with disposable income and who share similar values. So both sides benefit. OK, this suggests that health, income, and values are complements as features of people you socialize with. Why these as opposed to any other set of three positive features (such as humor, intelligence, residence, etc.)? I don't think there is such a strong current-income correlation, and even less for similar values. I think a large number of runners, who so often run alone, occasionally in small groups, are happy to affirm their membership in the community of runners. If you took 10 000 runners, split out those that had run in at least 1 (2? 3?) charity race in the last year (2? 3?), and then compared incomes and similar values, I'd guess little difference between the two groups. If Fabio had merely stated get to socialize with other runners, I'd agree totally. In fact, the inclusiveness of runners prolly extends to a general non-objection to virtually all charities. Other sponsorship might engender some runners towards self-exclusion (eg tobacco sponsors), where even unsupported unliked charities generally wouldn't. I also think that most organizers of running events barely cover the organizing costs through reg fees. But (very cheap me), I would usually run unregistered just to run--I didn't there was a big free runner problem. Tom Grey
Re: Charity and Races as Complements
I agree with John's analysis of charity and signalling. I add only that a more plausible reason than the two that John gave for why people don't mow lawns is that lawn mowing is a private good and racing a public good. In other words, I can collect a donation from many people for racing but few people will pay me to mow my own lawn (or anyone else's)! Alex Alex Tabarrok Department of Economics MSN 1D3, Carow Hall George Mason University Fairfax, VA, 22030 Email: [EMAIL PROTECTED] Tel. 703-993-2314
Re: Charity and Races as Complements
--- Robin Hanson [EMAIL PROTECTED] wrote: This is a confused about economics explanation They could spend the same effort they spent training for the race and running it doing their usual kind of job That's a good point. Of course, people who are salaried can't get a few extra bucks by staying late at the office since they're salaried. Wage earners really don't have that option, if every job I've ever had is any indication, since taking overtime is generally regarded as a cardinal sin except when specifically mandated by the company. They could get part-time jobs during their normal jogging time, but I don't see many help wanted ads asking for someone to work for seven hours a week. You'll have to convince me that the extra-work option is viable. They could sell Amway or Mary Kay for seven hours a week, but then they'd give up that good healthy exercise. If they're going to exercise anyway, then running isn't much sacrifice, as I suggested. Best regards, jsh __ Do You Yahoo!? Yahoo! Finance - Get real-time stock quotes http://finance.yahoo.com
Re: Charity and Races as Complements
Alex Tabarrok wrote: I agree with John's analysis of charity and signalling. I add only that a more plausible reason than the two that John gave for why people don't mow lawns is that lawn mowing is a private good and racing a public good. In other words, I can collect a donation from many people for racing but few people will pay me to mow my own lawn (or anyone else's)! Races are public goods?! How do I benefit if some other people run a race with each other? Is this just due to some externality that healthy people produce in general? Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Charity and Races as Complements
John Hull wrote: They could spend the same effort they spent training for the race and running it doing their usual kind of job They could sell Amway or Mary Kay for seven hours a week, but then they'd give up that good healthy exercise. If they're going to exercise anyway, then running isn't much sacrifice, as I suggested. If exercise isn't much of a sacrifice, then someone's willingness to do it isn't much of a signal of their commitment to a charity, which was the proposed explanation that I was responding to in the above. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Charity and Races as Complements
On Mon, 9 Sep 2002, Robin Hanson wrote: Alex Tabarrok wrote: I agree with John's analysis of charity and signalling. I add only that a more plausible reason than the two that John gave for why people don't mow lawns is that lawn mowing is a private good and racing a public good. In other words, I can collect a donation from many people for racing but few people will pay me to mow my own lawn (or anyone else's)! Races are public goods?! How do I benefit if some other people run a race with each other? Is this just due to some externality that healthy people produce in general? If the argument is that the race generates publicity which generates more support for the cause, then racing is a public good (or bad, depending on the nature of the cause I suppose). Eric Crampton Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
