ABSTRACT
Do donations respond to price and income in the same way as other goods and services? Andreoni and Miller design an experiment to test whether transfers to other individuals in dictator games conform to the General Axiom of Revealed Preferences. This review summarizes the contribution of the article and tracks its influence on subsequent research. Their work established that subjects’ transfers to others respond to the price of giving and endowment in much the same way that consumers respond when purchasing goods. In addition, they found substantial heterogeneity across subjects, and established, for the first time, that people differ markedly in their preferences for giving. The methodology developed in the paper has been used many times, and has been extended to the study of different research questions including gender differences, charitable donations, and variability in distributional preferences in political contexts.
