Tax incentives, individual characteristics and charitable giving in Singapore

Abstract

Previous studies conducted for developed countries like the United States, Canada, and the United Kingdom have often found charitable giving by individuals to depend on income, the tax price of giving, and other variables. This article makes use of confidential tax file data to conduct a similar study for Singapore, a rapid‐growing newly‐industrializing country. The results indicate that disposable income, the tax price of giving, donor’s age and educational attainment are important determinants of charitable giving by individuals. Donations are found to be income‐inelastic but highly price‐elastic. Thus, lowering the price of giving through tax incentives can be very effective in encouraging private donations to charity.

Generosity and Philanthropy: A Literature Review

“…Positive relations between philanthropy and level of education are found in most empirical studies that include education (Apinunmahakul & Devlin 2004;Banks & Tanner 1999;Bekkers 2003;2006b;Bekkers & De Graaf 2006;Bielefeld et al 2005;Brooks 2004;Brown 2005;Brown & Ferris 2007;Brown & Lankford 1992;Carroll et al 2006;Chang 2005a;Chua & Wong 1999;Duncan 1999;Eschholz & Van Slyke 2002;Feldman 2007;Gruber 2004;Houston 2006;Jones & Posnett 1991a;Kingma 1989;Lyons & Nivison-Smith 2006;Lyons & Passey 2005;Matsunaga 2006;McClelland & Kokoski 1994;Mesch et al 2006;Olson & Caddell 1994;Pharoah & Tanner 1997;Reece & Zieschang 1985;Reed & Selbee 2002;Rooney et al 2001;Schiff 1990;Schlegelmilch et al 1997a;Sokolowski 1996;Tiehen 2001;Todd & Lawson 1999;Van Slyke & Brooks 2005;Wiepking & Maas 2006;Wilhelm et al 2006;Yamauchi & Yokoyama 2005;Yavas et al 1981). Higher levels of education are also associated with giving a higher proportion of income …”

“…The typical finding on the relationship between age and philanthropy in the literature is that it is positive (Alpizar et al 2007;Apinunmahakul & Devlin 2004;Auten et al 1992;Auten & Rudney 1990;Banks & Tanner 1999;Bekkers 2003;2006b;Bekkers & Schuyt 2005;Belfield & Beney 2000;Boskin & Feldstein 1977;Bristol 1990;Brooks 2002;Brown & Lankford 1992;Bryant et al 2003;Carman 2006;Carroll et al 2006;Chang 2005a;Choe & Jeong 1993;Chua & Wong 1999;Clotfelter 1980;Duquette 1999;Eaton 2001;Eckel & Grossman 2003;Eckel et al 2005;Eschholz & Van Slyke 2002;Farmer & Fedor 2001;Feenberg 1987;Feldstein & Taylor 1976;Frey & Meier 2004a;Frey & Meier 2005;Greenwood 1993;Hoge & Yang 1994;Houston 2006;Jones & Posnett 1991a;1991b;Kingma 1989;Lankford & Wyckoff 1991;List 2004 Some studies find that the age relationship decreasing at higher age (Auten et al 1992;Belfield & B...…”

“…Obviously, higher income households donate higher amounts than lower income households (Abrams & Schmitz 1978;1984;Andreoni 1988;Andreoni & Miller 2002;Apinunmahakul & Devlin 2004;Auten et al 1992;Auten & Rudney 1990;Banks & Tanner 1999;Barrett 1991;Bekkers 2003;2006b;2007b;Bekkers & Schuyt 2005;Belfield & Beney 2000;Bielefeld et al 2005;Brooks 2002;Brooks 2005;Brown & Lankford 1992;Carman 2006;Chang 2005a;Choe & Jeong 1993;Chua & Wong 1999;Clotfelter 1980;Daneshvary & Luksetich 1997;Eaton 2001;Farmer & Fedor 2001;Feenberg 1987;Feldstein 1975a;1975b;Feldstein & Clotfelter 1976;Feldstein & Taylor 1976;Glenday et al 1986;Greenwood 1993;Gruber 2004;Havens et al 2007;Hood et al 1977;Houston 2006;Hrung 2004;James & Sharpe 2007;Jones & Posnett 1991a;1991b;Kingma 1989;…”

An Analysis of the Peer Effects in Charitable Giving: The Case of Taiwan

“…They also suggested that an income elasticity of 0.78 was representative. Studies of charitable giving based on tax return data found that the price elasticity estimates ranged from )1.5 to )3.02 in Taiwan (Chang, 2001), and from )3 to )6 in Singapore (Chua & Wong, 1999), which were higher than in developed countries.…”

Philanthropic Fundraising of Higher Education Institutions: A Review of the Malaysian and Australian Perspectives

“…Psychological rewards, which are motivated initially by material incentives, are found to increase contributions to the public good [24], such as tax advantages [54,114,135]. Similarly, those with higher incomes are more likely to claim gift deductions, as stated by [60].…”