Generosity Across the Income and Wealth Distributions

Abstract

There is little systematic evidence on the relationship between income, wealth, and charitable giving, despite its importance for the provision of public goods. We use the Panel Study of Income Dynamics to provide descriptive statistics on this relationship. We report simple means, as well as ordinary least squares and fixed-effects estimates, of three observable measures of generosity: the likelihood of giving, the (log) amount given, and the percentage of income given. We find that, irrespective of specification, the propensity to donate money and the amount given increase with a household’s resources. In contrast to much of the existing literature, we show that the mean percentage of income given is relatively flat across the income distribution after accounting for a small number of extreme observations. We also discuss the characteristics of these outlier households.