What Do Donors Discriminate On? Evidence From Kiva.org

The rapid expansion and adoption of internet-based microfinance platforms have provided an opportunity for individuals to direct philanthropy towards specific causes to a degree not previously possible. In this paper, we make use of rich, individual loan-level data from www.kiva.org, an internet website that facilitates philanthropic cash transfers from small scale individual donors to specific microfinance loan recipients, to examine whether, and what patterns of, discrimination exist based on the choices made by these donors. We exploit detailed information provided on each borrower though objective loan information, pictures and textual descriptions to investigate the determinants of individual charitable giving. We find that donors appear to discriminate in favor of more attractive, lighter-skinned, and less obese borrowers, even as donors appear to systematically favor regions of the world where lighter skin is less prevalent. These effects are statistically and quantitatively significant and robust across a variety of specifications. Discrimination on the basis of physical attraction and skin color appears to be heightened for female borrowers, while obesity matters more for male borrowers.