The Impact of Tax Deductibility on Charitable Giving by Covenant in the UK.

The 1985/86 Survey of Personal Incomes is used to estimate the impact of tax deductibility on giving by covenant. Estimates are based on two models: a generalized Tobit model, and Reece and Zieschang's (1985) model that allows for a nonlinear budget constraint. The results suggest that the latter is not appropriate for the U.K. tax system. In the Tobit models, the income effects on participation and expenditure are well determined and similar to those in previous work for the United Kingdom and in many U.S. studies. There is no robust evidence of a tax-price effect on participation or expenditure. Copyright 1991 by Royal Economic Society.