VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms

Little progress has been made toward understanding the relative performance of the two mechanisms most widely used for fundraising: the Voluntary Contribution (VCM) and Provision Point (PPM) mechanisms. This paper provides direct comparisons of the relative performance of variants of the VCM and PPM as they are most commonly implemented in the field. The research makes use of 1296 individual observations from 721 subjects, including 40 observations from a field experiment. A meta-analysis of the determinants of contribution levels and bootstrap estimates of the relative efficiency of the two mechanisms provide novel analyses of public goods experimental data. Overall, the PPM is found to increase total contributions, to be more responsive to changes in induced value, and to be generally more efficient than the VCM. For public goods with a benefit-cost ratio in the interval [1, 1.4), however, the VCM captures a greater portion of available benefits than the PPM. (c) 2004 Elsevier B.V. All rights reserved.