Peer Effects in Charitable Giving: Evidence from the (Running) Field

There is a widespread belief that peer effects are important in charitable giving but little evidence on how donors respond to their peers. Analysing a unique data set of donations to online fund-raising pages, we find positive and sizeable peer effects: a 10 pound increase in the mean of past donations increases giving by 2.50 pound, on average. Donations respond to both very large and very small amounts and to changes in the mode. We find little evidence that donations signal charity quality - our preferred explanation is that donors use information on earlier donations to decide what is appropriate for them to give.