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(When) Do Transfers Respond to Need? Evidence from Natural Disasters
CSDE Seminar, Co-Sponsored by the Evans School and the Population Health Initiative.

Speaker: Prof. Ben Marx, University of Illinois

Abstract: Natural disasters are becoming more frequent and more severe. Will charitable giving help us recover from their increasing toll? With donation data from the American Red Cross, we estimate determinants of aid in the aftermath of tornadoes and floods. Using two-way fixed effects models, we show that donations increase with the severity and proximity of a disaster. We then test for heterogeneity with respect to timing, location, and the demographics of the ZIP Code areas of both donors and victims. We find several forms of in-group bias in giving. Donations, and particularly those from areas that are rural and less diverse, are more responsive to disasters within a donor’s own state than to out-of-state disasters. In response to victims from out-of-state, donations exhibit in-group racial dynamics according to the share of white residents, with above-median white areas donating more to above-median white areas than to below-median white areas, and vice versa. We calculate the resulting disparities in aid received per unit of disaster severity.

More on our seminar series: https://csde.washington.edu/newsevents/seminar-series/

Oct 8, 2021 12:30 PM in Pacific Time (US and Canada)

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