Research Colloquium : Laura Grant

The Bren School of Environmental Science & Management
at the University of California, Santa Barbara

Presents

A RESEARCH COLLOQUIUM

Laura Grant
PhD Candidate
Bren School of Environmental Science & Management


Tuesday, Nov. 23, 2010
11:30 - 12:30
Bren Hall 1414

"The Response to Third-Party Ratings:
Evidence of the Effects on Contributions"

Hosted by Bren Professor Charles Kolstad

 

Abstract

While most people make charitable donations, they do so based upon incomplete information – they rarely can verify the use of donations. However, third-parties rate charity spending, and providing donors with this information may alter contributions. One possible effect is change due to different levels of ratings, from 0 to 4 stars. Another effect captures the change in contributions compared to the level before ratings were published, which depends on whether donor expectations of charity ratings are higher or lower than actual ratings. Published ratings do affect donations: I estimate that one additional star increases contributions by 3% to 8%. However upon becoming rated, charities receive fewer contributions than before, on average. This effect ranges from a negligible amount for 4-star charities to a 25% cut for 0-star charities. The effects are particularly striking for charities with far-removed goods, such as the environment or foreign aid. The results imply that donors over-rate charities and respond by decreasing contributions to rated organizations by $1 billion annually.

Biography

Studying jointly at the Bren School and the Department of Economics, Laura has disciplinary training in economics, with added exposure to natural science. While earning her master's degree in hydrology, she became interested in quantitative assessment of environmental policy. Over the past few years, she has developed a research agenda that spans environmental and public economics and emphasizes two themes: policy analysis and information disclosure. Policy analysis provides a retrospective assessment of environmental regulations, determining the extent to which intended effects are realized and, often, uncovering unintended consequences. Two examples are daylight saving time and marine protected areas. For the second theme of her research, Laura assesses responses to changes in information, such as organic labeling. Environmental and public goods are diffuse amenities, and a lack of information creates a classic failure to adequately provide them.

 

NOTE: Research colloquia are hosted by Bren faculty members and are generally high-level talks about research in a particular area of environmental science and management.

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