The Happiness of Giving: Evidence from the German Socioeconomic Panel That Happier People Are More Generous

Abstract

This study explores the causal direction between happiness and charitable giving. Through the application of Cohen’s path analysis, the main purpose of the study is to find evidence which of the possible causal directions—the one from giving to happiness or from happiness to giving—is the more dominant one. To that aim the authors use data from the German Socio-Economic Panel 2009/10. In a sample of 6906 donors, the relationships between monetary giving and life satisfaction were assed. Furthermore, we controlled for different variables such as age, gender, and marital status. Contradictory to the hypotheses development, the results of the Cohen’s path analysis indicate that the causal direction from happiness to charitable giving is the more dominant one. Through the study and our initial results we contribute to theory by highlighting the ambiguous causal relationship between the focal constructs and provide a statistical method to investigate such unclear causal relationships. We discuss how happiness, particularly the affective aspect, can be utilized by nonprofit managers to raise fundraising effectiveness and suggest areas for further research.