Visual Stimuli for Charity : A field experiment about recycling and charitable giving

Abstract: Never before has the interest for charity been greater. At this writing, U.S. charities have collected nearly one billion U.S. dollars (!) only in the aid for the disaster victims in Haiti.But can you get people to give even more? Are there yet unexplored market in which charitable organizations still have growth potential? Traditional economic theory which is based in individuals' rational behavior and self-utility maximization has a hard time to explain the phenomenon of charitable donations. But relatively new research can possibly connect the theory and the phenomenon through the theorem of warm-glow in why people actually donate money anonymously and indirectly to people they never met or will ever know who made the donation. This thesis will examine whether or not a small change in the environment could influence individuals to donate more money and / or more frequently. The study was conducted as a field experiment at an ICA store deposit station where people are faced with the choice to donate their deposit to the Swedish Red Cross instead of getting a voucher for themselves. The obtained results shows a statistically significant difference between the donation of the pledge of over 13 percentage more in the presence of a visual stimulus, more specifically a picture of a poor boy drinking clean water from a tap. That results in a doubling in nominal amounts of donations for the charity. Moreover, I find that people who already before the experiment are sympathetic to donating the pledge do so to a greater extent than people who were not. Neither sex nor age seemed to affect the results in any way.