An Analysis of the Peer Effects in Charitable Giving- The Case of Taiwan

Abstract

The purpose of this study was to utilize the data from the Survey on Family Income and Expenditure in Taiwan to investigate the influence of peer effects on the behavior of charitable giving. Based on the definitions of the reference group in this study, the estimation results suggested that peer effects on households’ decisions on both whether to make charitable giving and how much to contribute were quite modest. The study also found that the price elasticity and the income elasticity of charitable giving in Taiwan were larger than those in the U.S., which may partially explain the low ratio of charitable giving to GDP in Taiwan. The earthquake in 1999 substantially increased the amount of charitable giving though its effect diminished after sometime.