The effect of the dielectric screening on donor binding energies in a quantum wire has been estimated. Since the screening function is shown to be significant in a few phenomena like carrier transport, and not so in a few cases like the donor binding energy calculations, five different screening functions have been used in the calculations to see their relative merits. It is observed that the dielectric function obtained by Resta using the Thomas -Fermi approximation not only gives lower estimates of the ionization energies for all well widths (L), but also is shown to vary very rapidly with L. The other functions used are those of Hermanson and Vinsome & Richardson. Using the results of the variational calculations for the finite barrier problem, the diamagnetic susceptibility of a donor as a function of L has also been estimated. Though experimental results are not available, we have compared our results for E ion with other theoretical estimates available in the literature. The agreement is found to be good.