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Charity and Gift Exchange in Pakistan

Article in SSRN Electronic Journal · May 2009

DOI: 10.2139/ssrn.1443568

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Saima Naeem Asad Zaman

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TITLE: Charity and Gift Exchange in Pakistan
Authors: Saima Naeem$ & Asad Zaman*

$: State Bank of Pakistan (corresponding author: saima_pide@yahoo.com)

*: Pakistan Institute of Development Economics

ABSTRACT:

Our goal was to replicate an elegant demonstration of the Gift Exchange Mechanism (GEM) by Falk
(2007) in a door-to-door charity raising campaign. To our surprise, we were unable to replicate
these results in Pakistan; instead of increasing with gift size, donations decreased. Also, we
encountered two phenomena not previously reported in the literature: gift refusals and hospitality.
Because we did not anticipate these effects, our experiment did not provide significant information
regarding their causes. Indirect evidence suggests cultural and religious norms for charity may be
responsible for the observed differences. Further experimentation is required to provide better
evidence for our hypotheses in this regard.

Key Words: Gift Exchange, Charitable Giving, Culture, Hospitality, Gift Refusals

JEL-Classification: C93, D63

1. INTRODUCTION:
The history of economic literature is rich with contributions on gift exchange mechanism (GEM,
hereafter) and motives for giving charity. Pakistan is a developing country with strong social ties
and charity culture is rich. According to world giving index (2012)1, Pakistan is ranked 7th in the
world in helping the strangers and 65th in donating money. To study GEM in the context of
charitable behavior, we attempted to replicate an experiment of Falk (2007) designed around these
elements. In a postal campaign, Falk included no gift, a small gift and a large gift along with the
request for a donation to a charitable cause. As predicted by GEM, the donations received increased
with gift size.

Our experimental setup differs from that of Falk (2007) in that, instead of a postal campaign, we
conducted a door-to-door fund raising campaign due to low expected response in postal campaign. 2
Contrary to our expectations, we were unable to replicate Falk’s results in Pakistan. Also, we
encountered two phenomena not previously reported in the literature: gift refusals and hospitality.
We speculate that cultural effects led to the different results. Since the results were not anticipated,
our experimental design could not differentiate between plausible alternative hypotheses which
could explain these results. Further work is required to establish the relevance and significance of
potential alternative cultural factors.

1.1 EXPERIMENTAL DESIGN

The original experimental design of Falk (2007) is simple and elegant. Letters soliciting charitable
contributions were sent to 10,000 potential donors. One third of the letters contained no gift; a
second third included a small gift of one postcard, while the final third contained a large gift of four
postcards. There was a clear and significant response: donations increase with gift size. Thus Falk
established the significance of reciprocity and gift exchange, in addition to “warm glow” as a motive
for charitable contributions.

Our experiment was designed to replicate the results of Falk. Some changes to the design were
essential in the context of Pakistan. Financial penetration is low, and sending checks by mail is rare,
so a postal campaign would have a huge “no response”.3 Instead, we decided to use a door-to-door
campaign. This is a more expensive method, and budget constraints forced a reduction to a planned
sample size of 800. We used essentially the same small and large gifts for a charity campaign for a
small group of doctors in a famous hospital of Islamabad, Pakistan. This organization is working for
poor and needy patients who are not able to pay for their medication and other major medical
expenses. A detailed description of experimental design is provided in an appendix B.

1Available at: https://www.cafonline.org/PDF/WorldGivingIndex2012WEB.pdf

2Cash is overwhelmingly used for transactions in Pakistan, and most people do not have checking accounts
and sending checks by mail, whether for shopping or other purposes, is virtually unknown.
3Pakistan has one of the lowest financial penetration levels in the world with 56% of the adult population

totally excluded, and another 32% informally served (source:

http://www.sbp.org.pk/press/2012/MobileConf-15-Mar-2012.pdf )
Our experimental setup included a mid-experiment detailed meeting with the students hired as
solicitors for charitable contributions. In this meeting, our solicitor teams reported two very
interesting observations that we had not anticipated. These were: hospitality and gift refusals.
Solicitors were asked to properly record these two observations in the latter half of experiment.

1.2 GENDER AND INCOME

In addition to simple gift exchange, our experimental design also allowed us to assess the effects of
Gender and Income on donations. Here our findings are more or less consistent with those reported
in the literature with some minor variations.

Gender is among one of the consistent determinants of charitable behavior; relevant literature
shows that females in general are usually more generous in charitable giving than males (Leslie,
Snyder, and Glomb 2012; Einolf 2011; Mesch et al. 2011; Kamas, Preston, and Baum 2008; Piper
and Schnepf 2008; Mesch, et al 2006; Meier 2005). This finding is in conformity with our results. A
few of these studies also find that females are more generous in that a greater proportion
contributes, but when they donate, men donate more (Piper and Schnepf 2008; Andreoni and
Vesterlund 2001). This does not occur in our study, our studies are also in conflict with the findings
of a few studies where gender differences are either insignificant (Bolton and Katok 1995; Lo and
Tashiro 2012), or male donate larger amounts (Andreoni and Vesterlund 2001).4

The motives for charity giving also differ across gender; women are more likely to give to causes
related to education and health care (Einolf 2011; Mesch et al. 2011; Piper and Schnepf 2008),5
human services (e.g. child care, help for poor and homeless people) (Marx, 2000) and poverty
related issues (Regnerus, Smith, and Sikkink 1998). Male donations, on the contrary, are more likely
to be in sports, civil rights and adult recreations (Einolf 2011). Since we solicited charity for health
care, and females donated more, our results are in conformity with these findings.

Our study shows that largest donations are from females to female teams of solicitors. This finding
is different from a few earlier findings supporting cross gender favors (Landry et al. 2006;
Andreoni and Petrie 2008). Also, Ben-Ner et al. (2003) find lesser likelihood of women being
generous while giving to other women in dictator game setting. Similarly, our findings conflict with
Kamas, Preston, and Baum (2008) who found that men tend to give more to women-only teams in
dictator game. Cultural norms governing cross-gender interactions differ sharply from western
norms, and are a likely source for these differences. However, our findings also conflict with
Razzaque (2009), who studies gender effects in the ultimatum game with Pakistani students as
subjects. He finds that Pakistani cultural norms of courtesy towards females lead males to make
hyper-fair offers to female in the ultimatum game. It seems likely that this is due to difference
between norms among fellow students versus those prevailing in the traditional culture at large,
but our study was not designed to assess this.

Another intriguing finding regarding charitable behavior shows that women donate more when
altruism is expensive, but when it is cheap, men are more altruistic (Andreoni and Vesterlund 2001;

4 See Wit and Bekkers (2012) for discussion on differences in results.(Wit & Bekkers, 2012)
Similaritie s in Fundraising, 2010)
(Bek kers R. , Measuring Altruistic Behav ior in S urveys: The Al l-or- Not hing Dictator Game, 2007)(Bek kers R. , George Gives to Ge ol ogy Ja ne: T he Name Letter Effect a nd Ot her

5 However, Bekkers (2007, 2010) finds that men are more likely to give to health causes .
Piper and Schnepf 2008). If we proxy altruism by hospitality, both men and women, as well as
donors and non-donors provide roughly equivalent hospitality. At the same time, women donate
more. This indirect evidence does not support the cited results, but it can only be taken as
suggestive, due to small sample sizes as well lack of experimental design to test this effect.

Another strand of literature show that female donations are motivated more by empathy
(Willer, Wimer and Owens 2012) and social pressure (Della Vigna et al 2013). Again, our
experiment was not designed to test for these effects, but provides some indirect evidence to
support these findings in the Pakistani cultural context.

Literature on income and charity has two major theories. Some studies find that charitable giving as
proportion of income declines with income (Auten and Rudney 1990; Bekkers 2004). In contrast, a
few studies have also reported a U-shape trend, stating high proportional donation level for lower
and higher income group, and lowest for middle income group (Hodgkinson & Weitzman 1996;
James & Sharpe 2007; Andreoni 2004). Analysis across income group in our data seems to support
the former view that shows declining charity as a proportion of income.

2. RESULTS
In 255 cases, there was insufficient contact between the team soliciting donations and the
households. Excluding these from the total sample of 800, our active sample consists of 545
households. About 20% of the households made some donation.

2.1 FAILURE OF GIFT EXCHANGE

From the summary statistics in table 1, the relative frequency of donation in no gift is 24 %, which
decreased to 20 % in small gift; there is further decrease to 13% in large gift group. The frequency
of donation trends exactly opposite to the prediction of GEM. Summary statistics in Table 1 indicate
that highest number of donations was collected in no gift treatment, while highest average
donations were raised in small gift treatment. The large gift group stands out to be least effective
group in term of frequency of donations that consequently decreased average donations.

Table1

Summary Statistics of Donation in each Treatment Group

No Gift Small Gift Large Gift

Number of household visited 187 235 123

Number of donations 44 48 16

Likelihood of Donation 0.24 0.2 0.13

 Average Donations (in PKR.) 14.09 16.47 13.33

Max. of Donation Amount (in PKR.) 500 1000 1000

Average Contributions for Positive Donations (in PKR.) 59.9 80.6 102.5

While there is no evidence of GEM in term of frequency of donation, we do find that average
amounts of donation varied positively with the gift for those with positive donation. This fact
suggests that gifts might actually have a positive effect for those who decide to donate; they actually
give more after they got a larger gift, but this positive effect on donation amounts is completely
swamped by the decreasing relative frequency of donations. A more detailed discussion why GEM
might have failed is given in section 3.

Omitting significant covariates can occasionally reverse results based on simple ratios, as in
Simpson’s Paradox.6 A full fledged Probit and Logit analysis with all relevant observable regressors
on all observable relevant regressors is presented in Table 2 below. In the probit regression, the
dependent variable donation is defined as 1 for every positive donation, zero otherwise. Similarly,
we defined dummies for treatment groups and income level.7 Gender dummy is defined as “1” for
males, while all females were coded as “0”. We have also introduced dummies for gender of solicitor
teams i.e. both males (MM team), both females (FF team), and a male/female couple (MF team).
Dummy MM takes value 1 for Male-Male team and FF is 1 for female-female team. The second half
of the table 2 provides the results of tobit regression that investigate the effect of gift on the
donation amounts; here amount of the donation is regressed on the same set of variables. Both
regressions confirm the failure of GEM, with probit showing a significant negative effect of a large
gift on probability of donation. This is the only significant treatment coefficient in probit regression,
so gifts and gift size are either insignificant or have a negative effect, contrary to predictions of
GEM. Tobit regression also shows the insignificant effect of gift on the amount of donation collected.

Table 2

Regression Results

Probit Tobit
Std. Std.
Coefficient Error Prob. Coefficient Error Prob.
C -0.7 0.18 0.000*** -173.3 38.54 0.000***
Small Gift 0.0 0.17 0.872 18.1 32.84 0.581
Large Gift -0.5 0.20 0.020** -50.4 39.60 0.203
Male -0.4 0.14 0.005*** -84.2 26.32 0.001***

6 See, for example, Freidman, Pisani & Purves (1998) p. 17-20(Freedman, Pisani, & Purves, 1998)
7 Small gift treatment dummy is “1” if observation lies in small gift group and “0” otherwise. Similarly, high
income group dummy is “1” if respondent has income in high income range and “0” otherwise.
 High Income -0.1 0.15 0.359 8.9 29.13 0.759
Low Income 0.4 0.17 0.013** 64.8 32.85 0.048**
FF 0.5 0.19 0.006*** 102.2 36.44 0.005***
MF 0.4 0.19 0.038** 46.5 37.41 0.214
R2 7% 5%
***: Significant at 1 %, **: Significant at 5 %, *: Significant at 10 % level of significance

In addition to confirming the failure of GEM, the regressions show certain significant gender and
income effects which we discuss below, in separate subsections.

2.2 GENDER EFFECTS

Pakistani cultural norms relating to gender, and to cross-gender interactions, are substantially
different from western norms. Therefore, we can expect to see differences from existing
experimental studies conducted in the west. Some of the effects of these cultural differences are
documented by Razzaque (2009) and Naeem & Zaman (forthcoming) in the context of the
ultimatum game. We also find some differences in charitable donations as documented below. (Naeem & Zaman, forthcom ing )

2.2.1 Women donate more

We here compare both the likelihood and level of donation that both males and females make. Most
of the previous studies have found that women are more likely to donate and donate higher
amounts than men (Leslie, Snyder, and Glomb 2012; Einolf 2011; Mesch et al. 2011); yet we do find
few studies where gender differences are either insignificant (Bolton and Katok 1995; Lo and
Tashiro 2012), or male donate larger amounts (Andreoni and Vesterlund 2001).

Our results also parallel previous literature, both in term of amounted donated and likelihood of
donation. In our experiment, we found that female were more likely to donate compared to male
respondents. Out of total, 28 % of the respondents were female and their relative frequency to
donate was 29 percent; that is significantly higher than their male counterparts, i.e., 16 percent.
Probit results in table 2 also support the significance of gender effect on frequency of donation. In
term of amount donated, in our sample significantly higher amounts were also donated by female
respondents. Average donations by women were rupees 29.8; that is around threefold higher than
average male donations i.e., rupees 9.2.

Table 3

Summary Statistics of donation by Gender of Respondent

Male Female

Sample Composition (%) 72.1 27.9

Likelihood of Donation 0.16 0.29

Average Donations (in PKR.) 9.21 29.77

 Average Contributions for Positive Donations (in PKR.) 56.6 102.8

Fisher's exact test for Likelihood: P-Value =0.001*

***: Significant at 1 %, **: Significant at 5 %, *: Significant at 10 % level of significance

2.2.2 Women solicitors elicit more charity

Gender differences on the part of solicitors are prominent as well. As shown by the Probit- Tobit
regressions (see table 2), the FF solicitor team received significantly more donations, and also
greater frequency of donations.8 In fact, any team with at least one female on it has greater
likelihood of the getting donation with insignificant difference between FF and FM. This differs
from standard results where cross gender donations are significantly higher (Landry et al 2006;
Andreoni and Petrie 2008). We attribute higher donation probabilities to female solicitors to
cultural norms of showing chivalry and courtesy towards females in Pakistan (Razzaque 2009;
Naeem and Zaman forthcoming).
Table 4

Summary Statistics of donation for Solicitor Teams

Average Positive Average

Likelihood of Donation (in Donation (in
Donation PKR) PKR)
M-M Team 16.2 12.5 77.1
F-F Team 29.2 27.7 95.0
M-F Team 25.6 11.0 43.0
Teams with at least one female 17.8 12.2 68.6

Interestingly, even though the frequency of donation to MF team is close to FF team, the average
size of donations are significantly smaller than FF team and statistically equal to MM teams. It
appears that courtesy to females in FM team is token: it increases the likelihood of donation, but not
the amount donated. Our results contrast with those of Kamas, Preston, and Baum (2008), who
found greater effect of social image in the male-female mixed environment and concluded that
both males and females become more altruistic in the presence of opposite gender.9 Again, it
appears likely that these differences are due to cultural norms governing cross-gender interactions.

2.3 INCOME EFFECTS

8 To test the hypothesis of female donations are largely driven by same gender favors, we run a probit
regression by excluding female encounters to FF teams only (see table A in appendix A). The likelihood of
female donations are still higher than male respondents showing greater generosity by female in general.
9 In our experiment the higher frequency of female donation is higher for all the team combination i.e., MM, FF

and MF; however, we do not discuss the cross gender differences due to small sample size.
Charity to the poor is among the five founding pillars of Islam. Donating 2.5% of wealth as
“Zakat” is compulsory for every adult Muslim every year. Additional charity beyond this
minimal limit is also strongly encouraged. The Non-Zakat charity remains 54 percent of
total monetary charity during 1998, while over half of the individuals are reported to give
charity outside their families (Bonbright and Azfar 2000). In their “National Survey of
Individual Giving” for Pakistan, they find household income (rather than personal income)
to be a key determinant of charity. In terms of household income, 32 percent of monetary
giving was by high-income households. The lowest income group had the next highest
share (27 percent), though with higher sample share.

2.3.1 The Likelihood of Donation decreases with income

The results of our study show that likelihood of donating decreases with income.
The greatest likelihood comes from lower income group with 27% donation percentage.
High income group on the other hand is significantly less likely to donate than low and
middle income groups. Regression results in table 2 also show significantly greater
frequency by the low income group. A similar negative coefficient for income and
frequency of donation was observed by List (2004).

2.3.2 Proportion of income donated Decrease with income.

Income is also an important determinant of charity giving behavior. The exact

relation between income and donation as share of income remains controversial in
literature. Some studies found a U-shaped curve, such that giving as a share of income was
highest among the poor and the very rich (Hodgkinson and Weitzman 1996; James and
Sharpe 2007; Schervish and Havens 1995; Andreoni 2004), while other studies show that
there is a linear downward trend for proportion of income donated (Breeze 2004; Hoge
and Yang 1994; McClelland and Brooks 2004; Wiepking 2004; Wilhelm et al. 2007; Kamas,
Preston, and Baum 2008).

Table 5

Summary statistics of Donations by Income Group of Respondents

Middle
Low Income Income High Income
Group Group Group

Sample Composition (%) 23.1 38.7 38.2

Likelihood of Donation 0.27 0.20 0.15

Max. of Donation Amount 100 350 1000

 Average absolute Donations (in PKR) 11.87 10.07 21.75

Average Donation as Proportion of Income 0.00518 0.0004 0.00043

Positive Average Donations (in PKR) 44.0 49.4 146.0

Fisher's exact test for Likelihood (P-Value )

Low Income Group vs. Middle Income Group 0.18

Low and Middle income vs. High Income Group 0.03**

***: Significant at 1 %, **: Significant at 5 %, *: Significant at 10 % level of significance

The highest absolute average donations were collected from the high income group if
analyzed in absolute terms. The absolute average donation follows somewhat U shaped trend;
middle income group donated lesser amounts in absolute terms. The difference is not significant,
and our findings are consistent with the hypothesis that the low and middle income groups
contribute the same average amount, while the high income group contributes more on the
average. This increase in average donation (in absolute terms) with income is parallel to the finding
of (Bonbright and Azfar 2000), Auten and Rudney (1990), Bekkers (2004) and Rooney, Steinberg,
and Schervish (2001). However, if we adjust the donation amount with the income group,10 our
data supports a negative relation of donation as proportion of income. Donation amounts in the
low income group constitute a larger share as percentage of their income compare to middle and
high income groups.

3. WHY DID GEM FAIL

The most significant finding of our paper is the failure of GEM. Here we discuss some possible
explanations of this.

Literature on incentives has typically attached two possible responses to the incentives in GEM
context; first and obvious is the increase in desired behavior with incentives. The alternate
“crowding out” hypothesis assumes that sometimes, especially in pro-social situations, economic
incentives can suppress intrinsic motivation, and lead to reductions in output (see Titmuss (1970)
for blood donations).11 However, our analysis suggests that the failure of GEM is due to cultural
factors beyond the range of these theories. It seems more likely Pakistani culture, which is based on
Islamic injunctions regarding charity, leads to the differences we observed. Since we did not expect

10The proxy for average income in these income groups is taken as the middle value of the income range.
11Nobel Laureates Arrow and Solow both went astray in their analysis of an anomaly pointed out by Titmuss
(1970). Titmuss argued that monetary incentives would actually reduce blood donations, since it would
undermine the sense of civic duty which leads donors to donate. Both Arrow (1972) and Solow (1971)
thought otherwise; they argued that the two incentives would supplement each other. Frey and Oberholzer-
Gee (1997) show that crowding-out holds in donation: monetary incentives interfere with the sense of civic
duty, as argued by Titmuss (1970).
GEM to fail, our experiment does not provide direct evidence on the factors responsible for the
failure.12

Table 6 presents summary statistics of post mid-survey meeting, after which we collected data on
hospitality and gift refusals. This second half does not differ significantly from the first half of
experiment: i.e. negative gift exchange relationship, especially for large gift. Analysis of the data
shows that taking these phenomena into account does not affect our basic finding of failure of GEM.

Table 6

Summary Statistics of Latter Half of Experiment

No Gift Small Gift Large Gift

Number of household visited 96 129 51
Donations 24 25 7
Relative frequency of Donations 25.0 19.4 13.7
Hospitality 6 9 6
Relative frequency of Hospitality 6.3 7.0 11.8
Gift Refusals 0 9 18
Relative frequency of Gift Refusal 0.0 7.0 35.3

Despite scripted communication between the fundraisers and the respondents, people were
offering tea, soft drinks, and cold water to fundraisers instead of donation, although they could
easily donate an amount costing less or equal to cost of these offers. Hospitality is very prominent
norm in the Pakistani culture, and serving something to people at your doorstep is considered as
act of kindness. The finding of world giving index report (2012) also support the hospitable
behavior where Pakistan is ranked 7th in the world in helping strangers. A plausible hypothesis to
save GEM would be that hospitality replaces donations. However, analysis does not support this
conjecture. Even taking hospitality into account as a donation, we do not get a positive relation
between gift size and donations (see table B in Appendix A). Another evidence that hospitality is not
a substitute for donations is the roughly equal frequency of hospitality among donors and non-
donors (table C Appendix A).

The cultural and social norm of reciprocity is embedded in gift exchange; thus giving a gift
creates an implicit social obligation of returning the gift. One implicit assumption in experiments on
GEM is that gift will be accepted. However, in our experiment people refused to accept gifts. There
are three plausible motives behind these gift refusals;

12
Human interactions have been influenced by complex social structures operated through systems of social
norms. For many, religion is an important factor that influences social norms Durkheim, 1976). Despite its
important role both in shaping the societies in which we live as well as in affecting our behavior, religion has
only recently caught the attention of economists (see overviews in e.g., Hoffman 2011; Iannaccone 1998;
Kumar 2008).
 Table 7
Hypotheses for Gift Refusals
Motive Explanation
Crowding Out Introduction of gift changes the framing of request for charity to a
market exchange context, and interferes with intrinsic motivations for
charity.
Social pressure Respondents feel social pressure for saying no after accepting gift, so
they refuse the gift instead.
Religious Motives One important element of Islamic injunctions for charity is the need to
keep the intention pure; seeking fame, or other worldly benefits or
compensations for charity, ruins the good deed. Accepting a gift can be
viewed as a violation of this condition; in accordance with this, people
start refusing the gifts.

Table 7 presents explanations to three possible hypotheses behind gift refusals. While crowding out
and social pressure are plausible explanations for gift refusal in other cultural contexts, at least
three cases of donation despite the gift refusals do not favor these hypotheses. Della Vigna et al
(2012) show that social pressure as important determinant of door-to-door fund raising. A later
study by Della Vigna et al (2013) shows that females contribute more to charities because they are
more sensitive to social pressure. In our sample gift refusals in female respondent (1.3%) was
significantly lower than male responders (6.4%) providing some support to the idea that females
are more sensitive to social pressure; however the sample size is too small to confirm this. Refusing
a gift is contrary to social norms, and so men are more likely and capable of doing this then women,
because women are more subject to social pressure and hence more likely to accept gift even when
they don’t want to. However, the religious motive provides a better match to many observations.
Firstly, it explains donation with refusals, since Islamic injunctions are to seek neither fame nor any
other worldly return for charity. Also in accordance with this, we find that people seek to remain
anonymous by not taking the receipts. Many of them explicitly mentioned religious motives. If
religious motives are dominant in charity, than the observed higher gift refusal rate by males
requires explanation, because Seguino and Lovinsky (2009) find that males and females are equally
religious in Pakistan. A likely possibility is that women refused less frequently due to social
pressure, as women experience more social pressure and they also react more to social pressure
they face (Croson and Gneezy 2009). 13
A potential explanation for the highest number of donations in low income group also comes from
religiously rich cultural background. 14 Similarly, non-experimental observation also suggests that

13 While most of the literature says that women are more religious, the world value survey shows almost
equal score scores of importance of religion in Pakistan for both males and females(Seguino & Lovinsky,
2009).
14 In US where more than 82 percent of population attends church (Wiepking, 2007), lower income group is

more affiliated to religion so they donate more to religious donation than high income group (Schervish and
Havens 1995). In a study for Canada, Berger (2006) found Protestants are more generous, largely because of
stronger social norms and greater church attendance. Among the Arabs there was clear tendency of more
donations for exceedingly religious donors than the rest (Shai et al. 1999). Wiepking (2007) in her study for
religiosity is a major driver of behaviors in Pakistan, and must be explored more deeply in
subsequent work along these lines. The negative relationship with income and charity has also been
associated to the religious motivations (James and Sharpe, 2007; Brooks, 2005; Hoge and Yang,
1994). While there are studies showing religion as an important determinant for giving donation,
role of religious beliefs is rarely explored. Davidson and Pyle (1994) find that more orthodox and
stronger religious beliefs are positively linked to religious contributions. There is no such study for
Pakistan; however, Najam (2007) documents the strong role Islam plays in generating large
charitable donations from the Pakistani community in the USA. Also 98 percent of the donors in the
national survey of individual giving cited religious motivation for making donations (Bonbright &
Azfar, 2000).(Brooks, 2005)

4. CONCLUDING REMARKS
Peripheral to our main investigation of the GEM, we found that gender and income have a
significant effect on donations. Females were extraordinarily generous relative to male
counterparts in general and to female solicitors in particular. We also found that increases in
income lead to decrease in frequency of donations and also a decrease in proportion of income
donated; this is also consistent with other research on charity in Pakistan (Bonbright and Azfar
2000).

Our main finding is that the simple GEM does not function as expected in our field
experiment. The frequency of the donation decreases with the gifts. However, once respondent
decides to reciprocate through donation the amount of donation varies positively with the gift
exchange hypothesis. Two additional behavioral observations of hospitality and gift refusals
complicate our results. Our experimental design does not allow us to provide a clear explanation for
these behaviors. Evidence from other studies of charity suggests that the social and religiously rich
cultural norms may be responsible for the failure of GEM.

Gift refusals can also be explained within a religious context; data show some support for
religious concerns of avoiding wordly returns in exchange for charity. Gift refusals may also stem
from an unwillingness to incur a social obligation; i.e. the social pressure of saying no after
accepting gift. A religious motive for gift refusals would have substantially different implications,
and future studies may attempt to differentiate the two. However, a host of un-anticipated
complications created by use of door-to-door campaign can be reduced by employing more
impersonal and anonymous methods for soliciting donations. Greater anonymity might lead to
closer replications of conventional results. At the same time, this suggests that conventional
findings favoring simple gift exchange in the lab or by postal methods may not generalize to
situations involving less anonymity and more social interactions, even in other cultural contexts.

Dutch economy which is more secular (only 20 percent of church attendance) failed to find any effect of
income on probability of giving; he also argued that religious affiliation of low income group can explain the
giving behavior.
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APPENDIX A: SUPPLEMENTARY TABLES
Table A

Probit Regression after excluding female encounters to FF Team

Std.
Variable Coefficient Error Prob.
Constant 0.30 0.05 0.000***
Small Gift 0.01 0.04 0.792
Large Gift -0.08 0.05 0.086*
Male -0.07 0.04 0.065*
High Income -0.01 0.04 0.868
Low Income 0.13 0.04 0.005***
MM -0.10 0.04 0.010**
R-Square 4.10%
***: Significant at 1 %, **: Significant at 5 %, *: Significant at 10 % level of significance

Table B

Probit regression after treating Hospitality as GEM

Std.
Variable Coefficient Error Prob.
Constant 0.35 0.11 0.002***
Small Gift 0.04 0.07 0.560
Large Gift -0.01 0.08 0.872
Male -0.02 0.06 0.731
High
Income -0.13 0.06 0.034**
Low
Income 0.04 0.07 0.588
MM -0.11 0.09 0.216
FF 0.13 0.11 0.229
R-Square 6.70%
***: Significant at 1 %, **: Significant at 5 %, *: Significant at 10 % level of significance
 Table C

Relative Frequencies of Hospitality and Gift Refusals

Hospitality Gift Refusals

Male 8.2 12.1
Female 5.8 2.9
Low Income 5.0 8.3
Middle Income 11.2 12.9
High Income 5.0 7.0
Donated 8.9 5.4
Did not donate 7.3 10.9

MM 7.3 11.0
FF 9.1 5.5
MF 6.7 10.0
APPENDIX B: EXPERIMENTAL DESIGN
This experiment used door to door fund raising campaign for an organization founded by a
small group of doctors in a famous hospital of Islamabad, Pakistan. This organization is working for
poor and needy patients who are not able to pay for their medication and other major medical
expenses in given hospital. Apart from control group, we used gifts, used in Falk (2007), i.e., one
post card as small gift and a set of four post cards as large gift (Sample card in Attached below).
However unlike Falk (2007), our experiment was performed under different treatment setup i.e.,
door to door fundraising instead of a postal campaign.

In the city of Islamabad, housing tends to be homogenous by incomes, which make it easy to
stratify the area according to income group. We have stratified area being surveyed into three
income groups i.e. low, middle and high income groups15. The houses were then picked randomly
from the selected areas within each stratum16. Treatments were then allocated randomly in equal
proportion within each income group. The respondents in control group were given a brochure and
a call for donation, a post card was added into the set for small gift treatment group. Respondents in
large gift treatment got a set of four cards along with a brochure and donation call. After giving the
brochures /gift, fundraisers made donation call, they also politely asked about the income group
out of three given income ranges and noted the gender of the respondents. Solicitors were also
asked to note down any unusual observations which they felt were important (Data Recording
Sheet attached below).

A group of 20 students was hired from different universities as fundraisers and were given
a short training session for fundraising. During training they were provided with a small
introductory speech about organization and cause of the fundraising (Appendix C), for further
inquiry they were asked to guide them to call the helpline numbers mentioned on the brochure.
They were asked to stay away from any informal discussion to the maximum possible. Fundraisers
were divided into pairs randomly, and were asked to wear normal clothes consisting of dress pants
and shirt for males and traditional dress i.e. shalwar, kameez and duppatta for female fundraisers;
any fancy clothing was strictly prohibited. They were displaying their identity cards issued by
charity organization for authenticity; only one out of all visited household called hospital helpline to

15 We provided three income brackets to choose from, instead of asking their exact income. Further due to expected
homogeneity within strata, we replaced few cases of missing income group of respondent by income group of three
surrounding households.
16 Repeated every 20th house after selecting one random start.
confirm the authenticity of fundraising campaign. Fundraisers were offered flat wages (PKR 150
per hour; which is slightly above the market wage for entrants to public sector) for a given numbers
of respondents per day in randomly assigned treatment group. Each solicitor pair was randomly
assigned new treatment selected randomly at the start of each day. Further, we did not inform the
fundraisers about the experimental aspect of fundraising campaign.

Fundraisers visited around 800 households but were able to collect the data from 545
households. The rest were either not at home or refused to give time without listening to
fundraiser. As these respondents were not exposed to any treatment before they refused to
respond, we cannot attribute this non-response to treatment so these observations were discarded
from the study. To increase the chances of equal encounter with both sexes, solicitation was
planned after office hours.

SAMPLE POST CARD

DATA RECORDING SHEET
APPENDIX C: TRAINING FOR FIELD EXPERIMENT
The FS a nonprofit private organization FS (Name of organization here) initiated by a group
of God fearing and committed doctors and volunteers from ABC Hospital. They are committed to
help the poor and needy patients to assist them in the cost of treatment, essential diagnostic tests,
consultation, nursing care, and medicine either free or at subsidized rates. We not only
provide free consultation to needy patients, but also raise money for them by holding various
social events like annual fund raising dinner, Eid cards sales, food festivals, art exhibitions and
door to door fund raising schemes.

As a part of our effort, you are hired you to help us in raising funds for our noble cause. You have to
work in door to door fund raising campaign for three hours in afternoon 5 to 8 pm. The donations
you collect is signal of trust from people that the amount that they are paying will go to this noble
cause, to entrust the responsibility that has given to us, please take care to enter all the relevant
information on data recording sheets without any mistake and issue the receipts to the donating
respondents.

Task Details

All of you are provided with an introduction and donation call, we would appreciate if you stick to
these words. Each of you will be paired with different team member every day. At the start of
each day, you will receive a folder containing data recording sheets, fund raising location for that
day, a house number and fundraising protocol material. We have decided to use three different
protocols for raising fund.

 Protocol 1: A simple donation call according to given instructions

 Protocol 2: A post card will be added to donation appeal. Please present post card before
making the donation call.
 Protocol 3: A set of four post cards will be added to donation appeal. Please present
post card before making the donation call.

Please present post card before making the donation appeal in protocol 2 and 3.

You will be given a house number to start with; you have to select every 10th house for
donation campaign. You need to enter the house number, gender of the respondent, his or her
monthly income from given income brackets. Please don’t ask about their income directly, rather
ask to choose the income bracket that apply very politely.

You must enter the receipt number in case of any positive donation. If someone refuses to donate
without listening to the donation call please note it in the remarks section. If you feel to
share any interesting information, please record it in remarks field.

At the end of three hours, project coordinator will call you to collect the folders with properly
recorded data sheets and other material at the assigned place nearby.

Please remember
 You are requested to stay away from any informal discussion.

Properly display the identity cards issued to you. You are advised to follow dress code (shalwar,
Kameez and dupatta for females and dress pant and shirt for boys) during campaign; any
fancy clothing is strictly prohibited.

 If anyone needs to authenticate the validity of fundraising campaign, you should provide
them the official number.
 If you have any questions or if any unexpected situation arises please immediately call the
project coordinator for help.
 We will conduct a meeting after three working days to share your experiences and
comments.

Payment

You will be paid after delivering your data along with donation amounts with receipts at the end of
the day. You will receive a fixed wage of Rs. 150 per hour for three hours without considering the
donation you raise. The project time must not exceed three hours.

Introductory Speech (original speech was in Urdu)

My Name is Saima (Name of speaker), We are from a nonprofit private organization FS

(Name of organization) which consists of a group of God fearing and committed doctors and
volunteers. These are dedicated people who help poor patients at ABC Hospital. This money is used
to assist patients with the cost of treatment, essential diagnostic tests, consultation, nursing
care, and medicine either free or at subsidized rates. We raise money by holding various
social events like annual fund raising dinner, Eid cards sales, food festivals, art exhibitions and
similar door to door fund raising schemes.

FS is dedicated to make a difference in the lives of deserving and needy patients at ABC Hospital.
This is small gift from FS for you so that you can give it to your loved ones or enjoy it yourself .17 We
ask you to join us and help us in our noble cause. Your donations, in any amount either small or
large, are valuable to our organization.

17 For control group the underlined sentence was not included in the speech.

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