Modeling charitable contributions of time and money

Public goods theory predicts that government spending an charity can perfec tly crowd-out charitable contributions. Empirical research has found little support for the perfect crowd-out hypothesis. However, the empirical work only measures part of a contributor's total contribution: gifts of money. C ontributors also volunteer labor. This article extends the public goods mod el to the case in which individuals contribute both time and money to a cha rity that in turn produces a public good. The model suggests that charitabl e contributions of time and money are perfectly substitutable in equilibriu m. This result offers new interpretations for existing empirical observatio ns, and suggests a new test of the crowd-out hypothesis. The implications o f the model are empirically tested using a national survey of charitable ac tivity. (C) 1999 Elsevier Science S.A. All rights reserved.