Research

Charity, Impure Altruism, and Marginal Redistributions of Income

Warm–glow utility mitigates concerns that public giving crowds–out private giving dollar–for–dollar. Warm glow also means that utility is decreasing in the giving of others, ceteris paribus, and the willingness to pay for altruism is smaller (at the margin) if altruistic households have a positive willingness to pay for warm glow. Consequently, a marginal redistribution of income that passes the Pareto test may fail the test if altruistic households receive warm glow. Numerical evaluation shows that passing the Pareto test is very sensitive to cross–price elasticities between charity and labor supply, the elasticity of charity with respect to warm glow, the tax rate of the rich, and the fraction of the population that is rich.

Publication Information
Article Title: Charity, Impure Altruism, and Marginal Redistributions of Income
Journal: National Tax Journal (Jun, 2009)
Author(s): Allgood, Sam
Researcher Information
    
Allgood, Sam
Allgood, Sam
Edwin J. Faulkner Professor of Economics
Expertise:
  • Economic Education
  • Labor Economics (wages, employment, working conditions, unions)
  • Microeconomics
Economics
CoB 525 V
P.O. Box 880489
University of Nebraska-Lincoln
Lincoln, NE 68588-0489, USA
Phone: (402) 472-3367
Fax: (402) 472-9700
sallgood1@unl.edu