Life satisfaction and donation to charitable organizations

Abstract

In this thesis, the empirical link between individuals donations‘ to charitable organizations and their levels of life satisfaction is analysed, and the warm glow motive is tested in this context. Using a national representative data from US, I observed that there is a positive correlation between reported life satisfaction and individuals acts of giving. First, I found that individuals who donate to charitable organizations report a higher level of life satisfaction. Second, I found that individuals‘ reported life satisfaction levels are proportional to their amount of contribution to public goods. Consistent with the warm-glow motive, the life satisfaction level depends individuals‘ own the act of giving and their amount of donation. Third, by using instrumental variables techniques and selection on observed and unobserved variables method, the causal relation between the act of donation and individuals‘ reported well-being is shown. Fourth, it is observed that the act of giving affects the individuals‘ subjective well-being with regard to which type of organization they donate to. In this regard, the relation between donation to secular and non-secular charitable organizations and subjective well-being is examined.