Response to Ly
By Dan Coen
The article "Individual Preferences Over Development Projects: Evidence from Microlending on Kiva" is analyzes what effects a donor or philanthropists' decision to give money to specific charity organizations. This research includes viewing the effectiveness of publicly visible projects, the time time it takes to fulfill different types of loans, and the reasons for lenders fulfilling these loans more quickly and frequently than other projects.
Generally speaking, donors like to donate to publicly viewable charity projects and organizations. This is common sense because philanthropists want to make sure that the money they're giving is being used effectively, or to a specific cause that they can see the results of their donations from. Probably the most interesting result of the research is the time it takes to meet the donations of loans based on the poverty impacted problem they are related to. The loans that were fulfilled the fastest were ones that were related to education and health. These loans were given 76% faster than donation requests to agricultural purposes. Extremely interesting to me was entertainment loans being met the third fastest out of any category, which is likely due to donors being interested in international culture.
Kiva returns loans with 0% interest, which gives reason to believe that people really are donating solely for the desire to help people. However, it's important to note that often philanthropists will donate to projects in which they are more surely going to be repaid (areas like personal consumption are minimally funded). This article gives a good foundation of the reasons for which P2P users donate to specific projects, but as stated many times throughout the article, there is still much research to be done to on how philanthropists view projects as effective, and why their opinions differ so greatly from that of development organizations.
Kiva returns loans with 0% interest, which gives reason to believe that people really are donating solely for the desire to help people. However, it's important to note that often philanthropists will donate to projects in which they are more surely going to be repaid (areas like personal consumption are minimally funded). This article gives a good foundation of the reasons for which P2P users donate to specific projects, but as stated many times throughout the article, there is still much research to be done to on how philanthropists view projects as effective, and why their opinions differ so greatly from that of development organizations.
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