Charity Art Auctions

AuthorJose J. Canals‐Cerda
Date01 December 2014
Published date01 December 2014
©2013 The Department of Economics, University of Oxford and JohnWiley & Sons Ltd.
doi: 10.1111/obes.12045
Charity Art Auctions*
Jose J. Canals-Cerda
Federal Reserve Bank of Philadelphia, 10 Independence Mall, Philadelphia, PA 19106
Using a unique panel data set of art auctions on eBay, we conduct an empirical analysis
of the impact of charity status on the outcome of an auction and find it to be substantial.
Charity status increases the probability of sale by 46%, the observed number of bidders by
111% and the sale price by 45%. In addition, charity status substantiallylowers the auction’s
opening price. Interestingly, the effect of charity status declines over time indicating that
charity auctions may be susceptible to donor fatigue.
I. Introduction
In this article, we undertake an empirical study of a unique philanthropic event. Shortly
after the terrorist attacks of 11 September, 2001, many artists and other sellers on eBay
began an unorganized effort to collect funds for the families of the victims of the terrorist
attacks by offering all, or a portion, of the revenues from some of their art auctions for
charity. In addition, in response to a request for help from the then-governor of New York,
George Pataki, eBay launched a programme to facilitate the placement of charity auctions.
This programme became active on 17 September, 2001 and was labelled with the name
‘Auction for America’. The original intent of the programme was to collect one hundred
million dollars for charity in one hundred days. The programme reached its 100th day on
25 December, 2001. This philanthropic effort received contributions from more than one
hundred thousand eBay users and raised about ten million dollars.
We analyze a large panel of art auctions collected between July and November, 2001,
from a group of artists who post their work for sale on eBay regularly. Our panel includes
data from the Auction forAmerica (AA) programme as well as other charity (OC) auctions
that benefited 9/11 victims as well but were not part of theAA programme. Our analysis of
AA auctions identifies a significantly larger impact of charity status on market outcomes
than previously reported. We observe that AA status increases the probability of sale by
46%, the number of observed bidders by 111% and the sale price by 45%.Thus, our analysis
*Excellent research assistance was provided by David Donofrio,Tyson Gatto, WoongTae Chung, Jason Pearcy
and Kelvin Tang. I am grateful to Kristen Stein, artist and eBay power seller, for answering manyquestions on the
functioning of the eBay market. I am grateful to Katrina Beck for editorial assistance. These are the views of the
author, and should not be attributed to any other person or organization, including the Federal Reserve Bank of
JEL Classification numbers: D44, H41.

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