Income, Wealth, and Charitable Giving

Abstract

Using the Panel Study of Income Dynamics, we will study the relationship between charitable giving and income. We will use the data from years 2001 to 2013 to study the relationship between giving and income within individuals over the business cycle. Using panel data will allow us to account for intangible aspects that would affect a person’s propensity to give that cannot be accounted for using other methods. Charitable giving continues to grow every year and it is increasingly important for organizations and the government to be able to analyze it as best they can. We find that while probability of charitable giving increases with income; the most charitable are those with the least income.