Handbook of Research on Nonprofit Economics and Management
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Handbook of Research on Nonprofit Economics and Management

Second Edition

Edited by Bruce A. Seaman and Dennis R. Young

Building on the success of the first edition, this thoroughly revised and expanded edition explores (1) areas of general agreement from previous research; (2) areas of conflicting results and unexplored questions; (3) the relative roles of theory, data availability and empirical analysis in explaining gaps in our knowledge; and (4) what must be done to improve our knowledge and extend the literature. Selected original chapters addressing especially challenging topics include the value of risk management to nonprofit decision-making; nonprofit wages theory and evidence; the valuation of volunteer labor; property tax exemption for nonprofits; when is competition good for the third sector; and product diversification and social enterprise; international perspectives; the application of experimental research and the macroeconomic effects of the nonprofit sector.
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Chapter 9: Modeling nonprofit behavior

Patricia Hughes and William Luksetich


In Chapter 9 we focus on the modeling of nonprofit behavior starting with the structural components of model design that frame the organization’s behavior, followed by the theoretical issues associated with the choice of organizational form. We then consider the empirical evidence to reveal the goals of nonprofit organizations in specific industries and how the observed behavior of organizations corresponds to the various theories of nonprofit organizations posited in the literature. Theory predicts a bias towards higher quality provision by nonprofits that are organized for the public benefit and adhere to the non-distribution constraint. There is empirical evidence of systematic differences in the behavior of nonprofit and for-profit organizations in mixed industries consistent with these predictions. While there are some common characteristics that define specific industries, identifying the underlying goals of the organizations is not possible.

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