Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

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. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Friday, October 07, 2005

A Primer on the Economics of Altruism

From the St. Louis Fed.
  • Middle income people give a smaller portion of their incomes to charities than either the poor or the rich.
  • Women give more than men.
  • Once income is taken into account, there is no difference in charitable giving between races.
  • 75% of charitable giving is from individuals.
  • The motivations for charitable giving are varied and/or unclear.
  • Government programmes do not appear to crowd out private giving on a one-for-one basis.
  • The price of giving is lower for people in a higher marginal tax bracket.

"Although some people may be altruistic when giving, economics tells us that the dominant motivation is the internal satisfaction that individuals derive from the act of giving itself. Individuals derive utility from giving much in the same way they obtain satisfaction from buying a new car or eating at a restaurant; especially when the number of donors is large, the social context of other people’s giving is overshadowed by the satisfaction of one’s own giving when considering how much to give. "

[hat tip to Mahalanobis]

Does anyone have similar data for Canada or other countries?

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