An empirical test of neutrality and the crowding-out hypothesis

This paper tests Warr's neutrality hypothesis that the voluntary provision of a public good is independent of the distribution of income. Specifically, I test the null hypothesis of neutrality against the alternative that total contributions to a public good will be larger the less equally income is distributed. To test this hypothesis, a new data set is constructed by merging data on total voluntary contributions to individual public radio stations with 1990 Census data on the income distribution in each station's listening area. I find that voluntary contributions increase as income inequality rises.