Is More Information Always Better? An Experimental Study of Charitable Giving and Hurricane Katrina

We report results of an experiment designed to assess the impact of Hurricane Katrina on the pattern and level of charitable contributions of donors. The study includes an experimental measure of charitable giving and targets three charities: the American Red Cross, the Salvation Army, and Oxfam International. In the experiment subjects make allocation decisions from three endowments ($10, $20, and $50) and with four different matching subsidies (0%, 25%, 50%, and 100%), with the matching amount provided by the experimenter. Two locations (Texas and Minnesota) and two information conditions are used. Survey measures of sympathy, risk perceptions, and perceptions of Katrina victims are also collected. The probability and amount of giving are responsive to the experimental design parameters?the endowment and match. We find evidence of "Katrina overload" as those closest to the disaster respond negatively to Katrina-related priming information. Perceptions of the psychological attitudes of the victims of the disaster have a significant effect on the amount given."Hurricane Katrina was the most catastrophic natural disaster in our nation's history." -- David Paulison, Federal Emergency Management Agency (FEMA) Director