The effect of hierarchy on charitable giving : experimental evidence from a university donation campaign

Abstract

There is substantial belief that peer effects play an important role in charitable giving, but there is minimal evidence on how the giving of followers is affected by how much their leaders are donating. The caveat we would like to put on our readers’ minds is - would you donate more or less than your leader? We answer this question by conducting a field experiment in a target academic university in Singapore, and our results show that by revealing the identity of the leader and the amount donated to the follower, hierarchy effect actually acts as a ceiling and reduces giving. Additionally, we found evidence of positive social reference effect on follower’s giving, meaning that donors donate more when the social reference level increases. We also explore into the strength of peer effect in the context of a school, and find no evidence that peer effect actually plays an important role in improving giving.