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My Research

All of my research can be downloaded from my SSRN author page HERE.

 

The first stream examines the influence of competition within and across various organizational forms. Organizational form (nonprofit/for-profit /government) is important because it places material constraints and alters incentives of economic behavior. The nonprofit organizational form accounts for roughly fifteen percent of economic activity in the U.S. and dominates the education and health care industries. However, the precise incentives guiding nonprofit firms along with their interactions with various stakeholders are not well understood. My primary research stream draws from traditional industrial economic theory, but applies these models within the peculiar constraints and privileges endured by nonprofit firms. My work has specifically focused on the role of information asymmetry and incomplete contracts play in competition among nonprofit firms for scarce resources.  My recent work in this area includes:

 

  • Choosing to Give More: Experimental Evidence on Restricted Gifts and Charitable Behavior (Applied Economic Letters, 2013) It is common for charitable organizations to allow donors to place material restrictions on their gifts. Nonprofits and fundraisers generally believe that allowing gift restrictions will increase donation revenue. Restricted gifts are costly to the nonprofit because of increased management expenses and an inability to reallocate gifts to higher valued uses. We report the results of an experiment which tests the influence of charitable gift restrictions on donor behavior. We find that allowing restricted gifts significantly increases the amount given in a laboratory setting. However, we find no evidence that grant restrictions increase the probability of giving.

  • Entry Thresholds and Competitive Behavior Among Nonprofit Firms (Working Paper). This paper attempts to describe the competitive behavior of charitable non-profit firms when prices and output are difficult to observe. The paper exploits cross-sectional variation in market size to estimate the number of non-profits that can be supported within a market. We find that our sample markets generally reach competitive levels once three or more firms are observed. The paper offers several possible interpretations of these findings and future directions for our research.

  • Flypaper Nonprofits: The Impact of Federal Grant Structure on Nonprofit Production  (Public Finance Review, 2012)  . This paper examines the behavioral influence of federal grants on nonprofit firms. This study extends work on federal grants by examining the differential influence of incentive versus lump-sum style grants on the subsequent expenditures of recipient nonprofit firms. The paper draws detailed grant data from the Federal Assistance Award Data System (FAADS), which includes structural characteristics of the grant. Though relatively uncommon in the data, incentive grants are particularly effective at stimulating both additional fundraising activity and output of the firm. More widespread use of incentive grants could mitigate the tendency of government grants to reduce private provision of charitable goods.

  • Contractibility and Unrestricted Giving by Charitable Foundations (International Journal of Industrial Organization, 2010) Foundations often place material restrictions on grant use to charities order to reduce cross-subsidy of programs or opportunistic behavior. In contrast, charities typically Improved information between nonprofits and foundations would likely increase the frequency but reduce the inefficiency of these restrictions.

  • The Mixed Market for Foster Care (Annals of Public and Cooperative Economics, 2010)Beginning in 2005, private foster care placement agencies in the state of Kentucky may receive funding as either a for-profit or nonprofit organization. Economists have long been interested in the variation in incentives based on organization form, particularly in the context of government contracts. This paper uses a proprietary dataset of foster-care quality to demonstrate that entry of for-profit agencies into this market results in lower subsidy rates to foster care parents but no increase in the number of negative outcomes for foster care children. The paper argues that the nonprofit organizational form does not appear to offers a crucial governance safeguard, as has been advocated by the nonprofit sector. 
     
  • Contractibility and Competition among Nonprofit Firms (Journal of Law, Economics, and Organization, 2008). Donors have difficulty distinguishing between efficient/effective nonprofit firms and inefficient ones. We show that, under certain circumstances, nonprofits exploit this information problem to expropriate donations as perquisites.
  • Financial Reporting Quality and Price Competition among Nonprofit Firms (Applied Economics, 2008). Donors typically seek improved information about the financial condition of nonprofit firms. We find that donors reward nonprofits who invest in improved financial reporting quality (better and more accurate Form 990s). However, however improved reporting quality has the additional consequence of increased price elasticity, making competition among firms more intense.
  • Inefficiency in Donor Advised Funds (Journal of Personal Finance, 2008) Donor advised funds offered by large financial institutions are a popular alternative to setting up a small foundation. However, depending on asset allocation, we show that the embedded fees of these programs can more than offset any tax saving they create.
  • Nonprofit Fundraising in Competitive Donor Markets (Nonprofit & Voluntary Sector Quarterly, 2005) Highly competitive donor markets can cause nonprofit firms to allocate resources to fundraising beyond what is efficient to the donor (donor gets too much information). Collective fundraising (i.e. the United Way) may increase efficiency

 

 

My second research stream broadly explores the influence of religious preferences on economic choices. Economists have increasingly been turning their attention to the role of religion in economic decision making. Contrary to Sociology or Psychology, economists have not fully incorporated religion into their theoretical tool-kit. My research explores the influence of religion where it is most observable, charitable giving. As a secondary objective, standard economic principles have not often been applied in the context of explicitly religious organizations. Religious organizations such as churches, NGOs, or other agencies have been particularly resistant to business language and concepts. My papers have circulated widely among Christian organizations explaining how some economic concepts could considerably enhance the effectiveness and efficiency of their organizations.

  • New Evidence on Charitable Gift Restrictions (Applied Economic Letters, 2013): Gift restrictions are a common tool used by donors to ensure charitable intent. Due to increased monitoring costs and the loss of flexibility, gift restrictions are costly to the recipient nonprofit. Using an economic experiment, we study the impact of offering donors the option to restrict their charitable gift. Our primary finding demonstrates that allowing the option to restrict a charitable gift increases the average gift size, whether or not the donor chooses to exercise that option. This result implies that restricted gifts are both an important tool for increasing donations and may be less costly to the nonprofit than originally thought. We further demonstrate that high levels of religious attendance are associated with an increased use of gift restrictions and an increased responsiveness to those restrictions.

  • Afterlife Incentives in Charitable Giving (Applied Economics, 2013) This paper explores the influence of specific religious doctrines on charitable giving. Using PSID data, we categorize households based on the construct of salvific merit. We find that those households that follow religious traditions that have both strong doctrinal calls for charitable giving and a well defined concept of eternal punishment will be very resistant to changes in the economic subsidies to charitable giving. In contrast, religious households with weaker doctrinal positions on charitable giving or do not have well defined concepts of the afterlife behave similarly to secular households when charitable subsidies are altered.
     
  • Choosing to Give More: Experimental Evidence on Restricted Gifts and Charitable Behavior (Applied Economic Letters (2012): 

    It is common for charitable organizations to allow donors to place material restrictions on their gifts. Nonprofits and fundraisers generally believe that allowing gift restrictions will increase donation revenue. Restricted gifts are costly to the nonprofit because of increased management expenses and an inability to reallocate gifts to higher valued uses. We report the results of an experiment which tests the influence of charitable gift restrictions on donor behavior. We find that allowing restricted gifts significantly increases the amount given in a laboratory setting. However, we find no evidence that grant restrictions increase the probability of giving.
  • The Influence of Religiosity on Charitable Behavior: A COPPS Investigation (Journal of Socio-Economics, 2012) Using a brand new supplement to the PSID (COPPS), we examine how donors substitute between volunteering and charitable giving in the context of religious versus secular giving. The data spans several meaningful changes in the tax code which help us identify donor responses to variation in the economic incentives to give. We find that religious donors giving to religious causes are the least sensitive to changes in economic incentives, confirming previous theoretical research on religious behavior. In contrast, secular donors giving to secular causes are the most sensitive to changes in economic incentives to donate.

  • Agency and Incentives in International Development Partnerships (Faith and Economics, 2006) Donors face strong information asymmetries when funding causes overseas. We explore the possibility that religious commonality may reduce information asymmetry by creating trust. However, religious donors are less likely to use alternate governance tools, which largely negate the benefits of increased trust.
  • Why they Don’t Go (EMQ 2008) Using survey data, this paper examines the motivation and constrains to college students participation in international, full time Christian Service.

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