Are Tax Incentives for Charitable Giving Efficient? Evidence from France

This paper estimates the effect of tax incentives for charitable contributions in France. We focus on two reforms that increased the non-refundable tax credit rate for charitable contributions by 32 percent. We use a difference-in-difference identification, comparing the evolution of contributions for groups of households with similar income, but different taxable status due to differences in family size. We control for censoring issues and investigate distributional effects using a three-step censored pantile regression estimator. We find that the price elasticity of contributions is relatively small, but tends to increase with the level of gifts. (JEL D14, D64, H24)