Donate More,Be Happier! Evidence from the Netherlands

It is hypothesized that charitable donation provides psychological benefits collectively referred to as the “warm glow”. This study aimed to determine the magnitude of the “warm glow” of charitable donors based on subjective wellbeing data and real-world donation totals obtained from two surveys: the Longitudinal Internet Studies for the Social Sciences (LISS) and the Giving in the Netherlands Panel (GINP). Fixed effect estimates showed that when controlling for such major shocks to happiness as changes in marital status, income, and employment, charitable donors had higher happiness scores. To account for the endogeneity of donating, variation in the types of solicitation by charities was exploited. Some specifications from instrumental variable estimation showed that donating higher amounts of money increases life satisfaction significantly. The results show the local average treatment effect (LATE) for individuals who donate an extra Euro because they are solicited and these individuals would not donate this extra Euro if they were not solicited.