Friday, December 12, 2008

Top religion news stories of 2008

... listed here as voted by religion reporters. A couple of the top stories have received attention on our blog: number 6 is the new sect forming within the Anglican community; and number 9 concerns the reduction in expenses in faith-based organization. A couple other stories involve government interventions into religious markets. See the list for more details.

Thursday, December 4, 2008

The Church of Starbucks

Check out this YouTube video that finds humor in the marketing strategies used by churches. Many churches use marketing strategies similar to those used by secular businesses, such as offering certain goods and services to first-time visitors or advertising through newspapers and the internet. This video hypothesizes an opposite direction of influence, i.e., that a secular business could look to a church for marketing ideas. Part of the humor in the video is that it takes this direction of influence to an extreme level. I suspect many of the jokes will make more sense viewers who have attended certain types of churches, but any viewer can use his/her imagination and still get a good laugh.

Though it might not be the intent of the video's creators, the video is ultimately saying something about secularization. As discussed in class, we have observed secularization at the (meso-) level of religious organizations. In fact, the marketing strategies can sometimes be so similar between churches and secular businesses that the churches do seem like a type of business. Or businesses can seem like a type of church.

In one sense, this should not be surprising because both churches and secular businesses, at least in the U.S., are supplying goods and services in competitive market environments. Yet, the key difference lies in the types of goods and services being offered. Religious groups specialize in the production of clubs goods, which means religious groups must confront challenges in production not faced by some other firms. Religious goods also have a certain type of "habit-forming" property because of the role of religious capital. One of the important aspects of a church's strategy in gaining new adherents is getting people "addicted" to the religious goods and services, either because they develop a "taste" for it or because the social component of consumption has increased. One funny thing about the Starbucks example in the video is that both of these components are at work with coffee. Coffee is addictive, and drinking coffee can be a very social activity.

Bundling religion and pets

That's exactly what some religious groups are doing these days, according to this Examiner article. As discussed in class, churches can compete in the marketplace by bundling various products. Instead of going one place for religious services, another place for social support, another place for friendships, and so on, a person can go to church to obtain many different goods and services and at a lower opportunity cost. In fact, it seems religious groups have always bundled other-worldly and this-worldly goods. By bundling various goods and services together, a religious group not only competes with other religious groups, it competes with secular alternatives. As churches increase the scope of what they bundle, they can potentially improve their positions in the market.

The churches in this article are expanding the scope of their bundles by holding religious services meant specifically for pet owners who want to spend time with their pets. By combining the more standard religious services with something that seems very secular--taking your dog to the dog park--the religious group can potentially reach out to niche in the marketplace. If some people previously had to choose between going to church or going to the dog park, now they can do both.

Wednesday, December 3, 2008

More on the new sect

This Christian Science Monitor article discusses the latest developments in the new break-off Episcopal church. Also see this earlier post.

Updated 7:50pm: There's a CNN article, too.

A recession-proof religious business?

"There are very few recession-proof businesses left in the world, but the Cavanagh family of Rhode Island thinks they may have one - they make Communion wafers for millions of churchgoers each week.

"... [S]ales of the company's altar breads are up as much as 5 percent this year, a possible indicator of the national mood. Sales spiked 10 percent after the Sept. 11 attacks."
So begins this Boston Globe article. This is simple supply and demand at work. If the demand for church attendance increases during a recession, then the demand for certain supplies used during religious group meetings may also go up. Thus, their business is not just recession-proof; it is probably countercyclical: sales are highest during a recession and lowest during economic expansion.

But other factors not associated with a recession can also affect demand:
"The company noticed a dip in Catholic Church attendance reflected in lower sales in the early part of this decade after the church sex abuse scandal broke."
Again, this is basic supply and demand at work. The scandal decreased demand for church attendance, thus lessening the demand for wafers.

One of the more surprising things is that the Cavanagh Co. has an 80% market share in the U.S. I do not have a good explanation for why they maintain such a dominant market position. Any ideas?

Wednesday, November 26, 2008

Religion news from around the world

There has been a large number of class-relevant religion news items. I will not include all of them; here are just a few of them. I will restrain myself from making extensive comments and let you peruse the stories that interest you.
  • "Kazakhstan Passes Restrictive Religion Measure" - The new law restricts certain missionary activities, increases fines for unregistered religious groups, restricts the right to publish certain religious materials, and requires parents to give consent for their children to attend religious services.
  • "Religion May Help Extend Your Life" - According to a published study, the benefits of church attendance may go beyond the experiential and may extend to your health. There is what economists call an endogeneity problem here (does religion improve your health or are healthy people more likely to be religious), but you can read the story and judge for yourself.
  • "Hindus Find New Faiths in Marriage" - This article discusses the increase in number of Hindus entering interfaith marriages.
  • "Malaysia Leader: Yoga for Muslims OK without Chant" - We see here a religious population confronting the importation of a practice common frequently associated with a rival religious group.
  • On license plates, atheist billboards, and a split in the Presbyterian Church - See the AP's Religion news in brief.
  • "Religion - What is it Good for?" - This article summarizes some explanations for how religious inclinations may result from evolutionary pressures. These explanations are used by some to challenge a belief in the supernatural.

Tuesday, November 25, 2008

Adapting to change

In the last week of class, we will discuss how religious groups adapt to their changing environments. This news article (via Associate Press) describes how one religious sect has undergone tremendous changes in the last few decades. The Church Universal and Triumphant, once an assault rifle amassing, armored vehicle driving, apocalyptic group, has transformed itself into a publisher and online distributor.

The group's adaptation is described in the article. They no longer hoard guns, in part a result of pressure from the federal government. They no longer teach of an immediate end of the world, although that basic idea still permeates the teachings. After an earlier prediction of the world's end did not materialize, many people left the group while others stayed, and the earlier claims have been reinterpreted to maintain the credibility of the group's leaders.

We can interpret these changes as the group responding and adapting to the tension, trying to find the optimum. Pressure from the federal government meant tension was too high, for example. But the group is also trying to use online resources to expand their presence. And recent economic and political events are interpreted as evidence of the leaders' claims.

Monday, November 24, 2008

Happy Thanksgiving... but don't eat too much

In case you do eat too much, you can turn to faith-based dieting, according to the USA Today.

"Germany drops attempt to ban Scientology"

Read the AP story (via Yahoo News). The title is clear: Germany is dropping pursuit of a ban on Scientology. Yet, things are not all in the clear because surveillance of Scientologists continues.

The rhetoric is stark on both sides. On the one hand, many activists consider this a violation of Scientologists' basic "human rights." On the other hand, German officials consider Scientology inconsistent with the German constitution because, they claim, it mistreats people. This official's words are telling:
"This organization pursues goals — through its writings, its concept and its disrespect for minorities — that we cannot tolerate and that we consider in violation of the constitution. But they put very little of this into practice," Erhart Koerting, Berlin's top security official, told reporters. "The appraisal of the government at the moment is that (Scientology) is a lousy organization, but it is not an organization that we have to take a hammer to."
Oddly, the above quote seems unwarranted given something said by a different official:
"Before we open preliminary proceedings (leading to a ban), we need concrete evidence of unconstitutional activity," August Hanning, a Schaeuble deputy, said. "The security agencies are predominantly of the opinion that there is not sufficient evidence of this."
If the security agencies are predominantly of the opinion that there is not sufficient evidence of unconstitutional activity, then how can they logically justify the continued monitoring? Whatever the case, the cost of being a Scientologist remains quite high in Germany.

Thursday, November 20, 2008

A new sect forming as we speak

TA Wesley found this article from Reuters about a big development in the Episcopal Church (mentioned briefly in this earlier post). More conservative members of the Episcopal Church are not happy with the direction much of the Episcopal Church has taken, particular with the ordination of gay members to positions in the clergy. The more conservative members see this as a violation of important teachings. As the main body of the Church accommodates such ordinations, the more conservative members see breaking apart from the Church as the only way to continue practicing the religion in the manner they deem best. In general, this is the motivation for new sect formation.

Having a new church arise out of an older one is quite common. Some people in the church see the church going astray from their original teachings and conclude that the best option is to form a new church that more closely matches what they perceive to be an older, more correct version of the church. One interesting aspect of this Episcopal case is that the break-off group still wants to retain a particular official status within the larger Anglican community. That is, they do not want to leave Anglicanism; they just want to form their own version of it in the U.S.

There is a particular logic to this. By retaining certain ties to the original community, they can receive certain benefits that come from inclusion in that community. Put differently, it reduces the costs of separation because members are able to retain more of their religious capital. Receiving that recognition is not automatic, however. A presiding body will vote on whether to accept this new church in the community. If they do not vote in favor, this could potentially affect the success of this new church as some Episcopalians might not be less interested in joining the new group. In the minds of many, this is a risk worth taking.

Clergy lobby schools to eliminate a secular substitute

From today's AP Religion News in Brief: Clergy in St. Cloud, Minnesota, are trying to limit secular competition for some of their religious services. They are not asking for a specific change in law, which could in principle be done but would also probably not be very well received. Instead, they must resort to moral suasion and hope that the schools eliminate the substitute on their own.
St. Cloud pastors want Wednesday nights reserved for church

ST. CLOUD, Minn. (AP) — Clergy in the St. Cloud area are asking coaches and school activity directors to maintain the longtime tradition of keeping Wednesday nights free for church.

That's the night traditionally reserved for confirmation, youth group and other religious programs. But some clergy say sports and other activities have recently been causing a conflict.

Nearly 50 religious leaders, including St. Cloud Roman Catholic Bishop John Kinney of the Diocese of St. Cloud, signed a letter reminding schools of church events on Wednesday nights.

"It puts our children in a bad spot," said Ginny Duschner, faith formation director at the Roman Catholic Church of the Holy Spirit in St. Cloud. "They have to choose between two things that are important."

Duschner said many church leaders are running into more competition for Wednesday programs, which she said have "always been a high priority around here."

Andrea Swanberg, activities director at Technical High School, said that last spring bad weather that postponed games led to more Wednesday scheduling. Playoffs have also been scheduled on Wednesdays, she said.

"We still try to keep Wednesday open. We don't want the students and parents to feel this conflict," Swanberg said.

Wednesday, November 19, 2008

Following up on Islamic law in Britain

This NY Times article revisits the recent developments in Britain about the legal recognition for Islamic Sharia courts. See this earlier post for some of the economics.

Monday, November 17, 2008

More faces of religious competition

I am keeping my comments short here because there are so many.
  • A college fraternity or sorority is a club by almost any definition let alone our economic one. It should not be surprising then that they provide a forum for people to promote and foster religious ideals in college students. See this Chicago Tribune article about religious fraternities.
  • The Salvation Army is now accepting credit cards according to this Associated Press release. This should not decrease contributions, but will it increase them? By how much? Many people do not want to take time out of their hurried shopping to make a contribution even though they often use the "I don't have any change" excuse. If it is the opportunity cost of time that prevents contributions, then accepting credit cards will not help much as it does not increase the number of people contributing. On the other hand, if people are constrained by the number of bills in their wallet, then the people who already contribute may now be willing to contribute more than before because they can charge it.
  • The Mandaeans practice one of the world's oldest religions, but they are nearing extinction according to this Chicago Tribune article. The religious marketplace, like other marketplaces, experiences exit as well as entry.
  • Finally, here's a Wall Street Journal article about atheists' increased attempts to compete with religion. The very end of the article gets to the relevant economics. One issue is whether atheists can compete with the variety of goods and services offered by religious groups, including the many club goods. The writer seems to question their ability to compete, though it would have been nice if the writer explored this in more detail:
    Still, leading activists say nonbelievers tend to be just as wary of organized atheism as they are of organized religion -- making it tough to pull together a cohesive movement. "A pastor can say to his flock, 'All rise,' and everyone rises. But try that in an atheist meeting," said Marvin Straus, co-founder of an atheist group in Boulder, Colo. "A third of the people will rise. A third will tell you to go to hell. And a third will start arguing....That's why it's hard to say where we're going as a movement."

Thursday, November 13, 2008

The various faces of religious competition

Some recent news articles and items illustrate the various dimensions of religious competition. Sorry I don't have time to say more about them.

From the recent AP Religion News in Brief:
  • Hindu militants in India have attacked and even killed Christians and destroyed churches. This is an example of "social regulation" by citizens not government, which we will discuss next week in class.
  • Churches must also find ways to innovate in producing their religious goods and services. An Episcopal Church in NY removed two dozen pews to improve the "feel" of the religious meetings. You can apparently get one of those pews for "only" $300 on Craigslist.
  • As religious organizations adapt in order to compete in the religious marketplace, some members may not like the adaptation, and this can lead to the break-up of a Church. The Episcopal Church has faced such internal pressures recently.
Also from the AP, see this article about secular humanists using advertisements on buses as a way to compete with religion as the holiday season approaches. Humanists argue that they provide a good substitute for religious belief and activity.

Friday, November 7, 2008

Ten-year anniversary of the International Religious Freedom Act

October 27, 2008, just last week, marked the ten-year anniversary of the International Religious Freedom Act (also see wikipedia). In short, the IRFA made it a matter of U.S. foreign policy to promote religious freedom around the world. On H.W. 7, you will read more about this act and the United States Commission on International Religious Freedom.

In honor of this tenth anniversary, the Pew Forum on Religion and Public Life has a Q&A with Allen Hertzke, a close observer of the creation of the IRFA.

Thursday, November 6, 2008

Tidbits from today's AP "Religion news in brief"

Want a Christian-themed license plate for your car? You can get one in South Carolina... at least, that is, until and unless the courts decide it violates church-state separation laws.

Want to read your Hebrew prayers on your BlackBerry? For $30 you can download the JewBerry software. Yeshiva University President said, "I love it, because now I can not only look how the market is doing, but I can also say my evening prayers."

See the full AP news brief here. You can read about the 8th-grader sent home for dressing like Jesus on Halloween, about a ruling that keeps crosses on a city's logo, or, on a more serious note, about the Dalai Lama's deteriorating hopes for Tibet.

New religious regulations in Krygyzstan

As reported here, government officials in Krygystan, a small central Asian country, yesterday passed a bill that places new restrictions on the operations of religious groups. If President Bakiyev signs the bill, which is expected, certain types of proselytizing will be outlawed and religious teaching in private schools will be forbidden.

Critics say the bill curtains fundamental human rights. Supporters say the bill promotes better oversight and reduces religious tensions. Economists of religion say that the regulations are an attempt to curtail religious competition that will benefit religious groups already entrenched in the society by reducing religious consumers' viable religious alternatives.

I do not know the background of the bill or what are the particular interests of those who promoted it. A student could look more into this and write up what they found, using economics to talk about the incentives of the different relevant actors.

Tuesday, November 4, 2008

Religion and the election

The Pew Forum has a web site dedicated to assessing the election. Check this site soon for all sorts of facts and figures about how people of different religious groups voted in the election.

Monday, November 3, 2008

Surfing the world wide church

This Newsweek article mentions attempts to use the Internet to replicate (or replace) the traditional community component of religion. Instead of going to church, just log in online. At some Christian sites, you can even participate in the communion online, which is a different kind of openness in communion than that mentioned in an earlier post.

Many religious groups use advances in technology to either provide their religious services more effectively or to provide new types of religious goods. We sometimes think that religious groups abhor new technology, but this attitude is more the exception than the rule. Throughout history, religious groups and individuals have incorporated new technologies just as other groups and individuals. Think of printing presses used centuries ago to produce religious tracts and holy writings. Today, most churches have some presence online even though most do not actually hold religious services online. Another article from today even describes a new Catholic television station that is only available online.

Providing religious services such as communion online is just another example of religious entrepreneurship. One interesting question for us is how good a substitute the online church is for in-person church. The article mentions how some aspects of community can be replicated online while others cannot. This matches our club theory; some of the goods that are produced collectively at an in-person church service cannot be closely replicated online. Thus, online church for many people will be an imperfect substitute for church in person. However, there are some who will prefer the online experience. The interesting thing will be to see how large this particular market becomes. Given that young people, in particular, enjoy networking online, I would not be surprised to see this type of market survive in some form, though it will not likely have a large market share.

Friday, October 31, 2008

What did you expect on Halloween?

Here's an article on Wicca, a neopagan religion that economists of religion have not much studied (though others have). One interesting thing for us about Wicca is that Wiccans explicitly incorporate magic into their beliefs and practice. At first glance, we would expect the credibility of Wicca practices and beliefs to diminish as magical claims are falsified, but you might be surprised to know that the number of Wiccans appears to be growing. My guess is that this is because Wicca groups are structured to provide club goods. For example, Wicca groups (e.g., covens) are kept small and there can be probation periods before entry, both of which work to weed out free-riders; and initiation rituals, which are easy to exclude but also social events in which many people can participate, are classic club goods. Wicca groups thus provide many of the types of goods provided by other religious groups. They are more different from other religious groups in degree than in type. See this wikipedia entry on Wicca for more information.

Islamic banking during the financial crisis

A Washington Post article asks how Islamic banks are performing during the current financial crisis (you may need to log in for free at the web site to view the article). Islamic banks uphold Sharia (the Islamic law that was mentioned in an earlier post here), and one of the key features is that they do not charge interest. Because banks make earn profits from the interest on dispersed loans, Islamic banks must devise another way to earn profits. They do this by having profits structured into the loans in a way akin to interest but different enough to comply with Sharia. Islamic banks also tend to issue less risky loans. This has allowed them to perform better than others during the crisis, though, of course, they will usually have smaller returns on average. There is a standard risk-return trade-off here.

Wednesday, October 29, 2008

One reason why religion survives despite predictions of its demise

A Guardian UK article asks why religion has endured despite all the predictions of its demise. Here's one economics explanation given:
One underlying reason for religion's endurance is that science treats humans and intentions only as incidental elements in the universe, whereas for religion they are central. Science is not particularly well-suited to deal with people's existential anxieties – death, deception, sudden catastrophe, loneliness or longing for love or justice. It cannot tell us what we ought to do, only what we can do. Religion thrives because it addresses people's yearnings and society's moral needs.
In other words, there is a latent demand for certain goods that cannot be acquired via standard scientific method, so we not should not be surprised that suppliers of these goods, which we call religious goods, will survive in the marketplace. We will talk about this later in the quarter. The article also gives some (non-economics) cognitive/neurological explanations for the persistence of religion.

Tuesday, October 28, 2008

"Buddhist Temple Built from Beer Bottles"

Um, that's a lot of beer bottles.

More on people turning to religion during the financial crisis

See this Washington Post article.

The economics of Islamic law in Britain

This RNS article (via Pew, also reported elsewhere, e.g., this Times Online article) reports a new development in British courts regarding Islamic law. Sharia (see wikipedia) is the body of Islamic law. In western nations, this law has no official legal status. However, Muslims may still prefer to have Sharia councils rule in legal disputes, especially those concerning family or property, because they want those disputes to be resolved according to Islamic legal principles. The British government has just determined that parties in a Sharia court can apply for (British) legal approval of Sharia rulings. A British official would only have to ascertain that the Sharia ruling complied with British legal principles.

At one level, the economics of this development is straightforward. Parties often use an independent arbitrator (see wikipedia) to resolve contract disputes because doing so usually involves much fewer resources spent on lawyers and the development of legal documents and arguments. It also relieves pressure on the government's legal system because arbitration results can be legally binding while keeping the parties out of court. Thus, all parties benefit. Muslims who use Sharia councils to resolve their disputes are essentially using Islamic law to guide a private arbitration. They benefit because they get to have Islamic principles resolve their disputes and because the costs are lower than public courts, while the public benefits because the strain on the public courts is relieved. The recent British ruling actually established Sharia councils as private arbitrators.

But there are the subtler economic issues here, too. This development has its critics, and one of the biggest worries is that the Sharia courts will not comply with British legal principles, especially with regard to the treatment of women. Another concern is that Muslims will be further marginalized in British society because they are withdrawing to a privatized legal sector instead of using the public court system. Either way, this development would lead to increased stigmas as Muslims draw themselves apart from the rest of British society. This constitutes an increase in costly tension between Muslims and society.

We discussed how this sort of tension can actually help the group, but it is possible that this is not the case here. One of the Muslims' arguments is that other religious courts (e.g., Jewish) already had arbitration status, and so the development is really a way for Muslims and their practices to find improved acceptance in society. Put differently, this development should actually decrease tension as society becomes more accepting of Muslims' practices. If so, this decrease in tension, combined with the benefits of religiously-based arbitration, is a win-win situation. The key issue is whether or not the Sharia courts comply with the British principles of fairness and equity. This is what must play out in the future.

Monday, October 27, 2008

Investment funds as religious entrepreneurs

Check out this article about religiously-themed investment funds from the latest Time Magazine titled "Which Religion Picks the Best Stocks?" These investment funds cater to financial investors of particular religious traditions by using religious ideals or doctrines to guide the selection of assets to purchase. For example, Amana Funds, which an Islamic-themed fund, does not purchase stocks with more than 5% stake in alcohol, pork, or tobacco, all of these being impure goods.

In terms of profitability, these religious funds should in general do worse on average than other, let's call them secular, funds. Why? First, if religious funds did better than secular funds, then secular funds would switch to the religious investing strategy and do better than when using a secular strategy. Hence, secular funds should not do worse on average than religious funds. Second, religious funds are restricting themselves to a smaller set of financial assets. Barring an incentive to confine one's choices (which can arise in very strategic settings but I think not so much in this investing settings), this should only act to reduce the return. This does not mean secular funds always do better in a certain period of time; fluctuations and randomness can generate all sorts of outcomes, such as during our current financial crisis. It just means that secular funds should do better than religious funds on average. The difference is what we can call the religious premium; the amount the investor pays (gives up) to retain a religiously satisfactory investment strategy. The stronger the restrictions on investing, the larger the premium.

But the fact that the religious funds are expected to do worse and yet still survive in the marketplace is what makes them much more interesting. As I see it, a religious fund is a type of religious entrepreneur. The reason investors use these funds even when they know that the return is lower is that they value, for religious reasons, the knowledge that their investments are in companies that produce ethically appropriate goods and services. This knowledge and satisfaction is tied directly towards their religious proclivities, and so the fund can actually be thought of as providing a religious good. Thus, we observe a religious good being produced and sold not by a church but by an investment firm.

We can take the logic even further. As long as the barriers to entry into the investment industry are low, we should actually expect these entrepreneurs to emerge. Moreover, the religious premium can be a measure of an investor's commitment to ethical investing. Just how much are you willing to forgo in expected profits to follow an ethical investing strategy?

Friday, October 24, 2008

More of the supernatural in baseball

Here's some fun weekend reading as you watch the World Series.

Clubs and the economics of the open Eucharist

Another timely news article comes from today's Boston Globe titled "Who is Worthy to Receive?" Traditionally, Christian denominations only allowed official denomination members to participate in the Eucharist ritual communal meal of bread and wine/water (also called communion or sacrament). As the article explains, many stricter denominations retain the policy of exclusivity. Yet, over time the local leaders in many less-strict denominations have relaxed the exclusivity so that anybody (including a non-Christian) is allowed--or at least not forbidden--from participating even though official policy might forbid the practice.

Policies of exclusion are often labelled unfair or unkind--a value judgement which could be entirely valid. However, our economic analysis sheds new light on the practice. We will discuss in class that religious groups trying to provide certain religious goods often have policies of exclusion as part of an overall strategy to limiting free-riding. Think about it: a policy that states "only members in good standing can participate in the Eucharist" is effectively saying that only people contributing in some way to the congregation can receive the benefits. Though the policy is costly in part because it appears unkind, it can actually in the end work out to the benefit of the group precisely because it selectively rewards people who are contributing more to the group. This comes right out of our economic theory of clubs.

The theology professor quoted seems to recognize the crux of the issue:
"When you're trying to welcome people into a denomination and lower the signs
that say, 'This is a club and you can't get in,' how do you say, 'The church
welcomes you, and invites you to join us, but, oh, by the way, you can't come to
the table?' " said Fredrica Harris Thompsett, a professor of historical theology at
Episcopal Divinity School in Cambridge.
Though the quote uses the word "club" when referring to exclusivity, it (at least what is actually quoted) does not seem to recognize the free-rider issue.

Competing theologies of prosperity

Today's Wall Street Journal has an article on Prosperity Theology by the prominent scholar of religion Peter Berger (we'll encounter him later in our course). He writes that Prosperity Theology is:
. . . a version of Christianity asserting that material benefits will come to those who have faith, live a morally upright life and, not so incidentally, give money to the church. Broadly speaking, this is what Max Weber called the Protestant Ethic, but with much less emphasis on self-denial and more on hard work, planning for the future, family loyalty and educating one's children.
Berger also mentions a counter-theology:
[T]he prosperity gospel -- usually seen as being on the Christian right -- closely resembles the "liberation theology" of the Christian left, except that the latter's enrichment program is collective rather than individual. Liberation theology defined Christianity as essentially being a struggle of poor oppressed people against capitalism and imperialism.
Both theologies represent attempts to make religious thinking relevant for people who want economic security. Both stress that people must work to bring about the desired outcomes, though the former gives more credit to supernatural sources of this-worldly goods. Our theory suggests that each of these will survive as relevant religious teachings so long as the expected rewards of acting according to the teachings outweigh the costs. Liberation theology is challenged by the widespread belief that capitalism, despite its flaws, is better than the alternatives. Prosperity theology is challenged by the experiences of those who do not prosper as promised. But given that the teachings are both difficult to falsify, we should expect them both to be around for a while.

Thursday, October 23, 2008

How religion influences behavior?

In our class, we are using economic concepts to study individuals' religious choices, i.e., how economic incentives influence religious choices. But there's an equally important and interesting opposite direction: how religion influences individuals' economic choices.

Unfortunately, we only have time to focus on the first direction in our class, but you should be aware of the large body of research and thinking on the second direction of influence. For example, you have probably heard of Max Weber's idea that Protestantism helped promote the development of capitalism (see this wikipedia article).

The literature is actually too large to mention it all. But if you are interested in the most recent research on this second direction, then you can skim this short survey paper by Evelyn Lehrer. She writes (p. 9):
Commitment to religion--in its various manifestations, including the strength of religious beliefs and the extent of participation in private and public religious activities--can affect demographic and economic behavior via two major pathways. First, a higher level of religiosity may be expected to accentuate the effects of religious affiliation, e.g., the tendency for conservative Protestant women to display low levels of employment when young children are present in the household should be most pronounced among highly observant conservative Protestant couples. Second, the generally beneficial effects of religiosity on health and well-being can have important implications for economic and demographic outcomes, e.g., children raised with some religious involvement in their lives tend to have better performance in school and to achieve a higher level of educational attainment.

Religious capital theory in action

What perfect timing with this just published article on conversions into the Orthodox Church. Notice the first paragraph:
A new study of Orthodox Christians in America has found a larger-than-expected number of converts, mostly from Roman Catholic and evangelical Protestant backgrounds.
In practices and doctrines, Roman Catholicism is very similar to the Orthodox Church, so converts to the Orthodox Church from the Roman Catholic Church are retaining much of their religious capital when switching. The switch from evangelical Protestantism involves a bigger change, but that change is probably more in ritual and practice than in doctrine.

Notice who is not mentioned as converting. Converts into the Orthodox Church, which is a Christian denomination, are coming from other Christian denominations--not from Buddhism, not from Islam, not from Hinduism, etc. Here's our religious capital theory in action.

Tuesday, October 21, 2008

Submit post opportunity: praying for your 401(k)?

Here's a Time Magazine article asking if it is OK to pray for your 401(k) retirement account. This is begging for some economic analysis. If you want to submit a post on this topic, please email it to the blog administrator.

Monday, October 20, 2008

Religious tax-exempt status and campaigning: church-and-state or religion-and-politics?

We in the United States have a political doctrine of "separation of church and state." As commonly interpreted, the First Amendment says that government should not interfere with private citizens' "free exercise" of religion and should not "establish" an official state church. But this separation is often misinterpreted to mean that religion and politics should never mix, even though this view is contrary to what has always been the case in the U.S. For example, a person's religious beliefs and affiliations can inform and influence his or her politics, and religious groups are free to speak out on political issues with moral dimensions. Nothing is illegal about either of these infusions of religion into politics. Nonetheless, the boundaries between disallowed church-state relations and allowed religion-politics interplay is continually negotiated, and the rules of the game can change.

One of the boundaries being challenged is that which prohibits religious groups from supporting political candidates. As legally recognized institutions, religious groups are subject to tax laws, and most are registered as non-profit institutions--classified 501(c)(3) so you can write off your donation to your church from your taxes. If a religious group campaigns on behalf of a candidate, then its tax-exempt status is jeopardized. Losing tax exempt status is a BIG deal, so a religious group would not want to lose it. The economic logic behind wanting tax-exempt status is straightforward. Tax-exempt status decreases costs (churches do not have to pay taxes on their income), and because in the U.S. the government does not financially subsidize religious groups' primary activities, tax-exempt status allows for larger financial donations (the cost of contributing is lower to taxpayers because it is a tax write off). In short, tax-exempt status greatly improves a religious group's ability to provide religious goods and services in the American religious market. For more details on what is prohibited and why see this excellent Guide to the IRS Regulations compiled together by the Pew Forum on Religion and Public Life.

As described in this Pew Forum article, religious leaders are challenging the law that prohibits their involvement in campaigns. Yet, as the article states:
"While a strong majority of Americans support religion’s role in public life, a solid majority also expresses opposition to churches coming out in favor of particular political candidates."
What economic logic is behind the argument against the current rule? What economic logic is behind the argument for the status quo?

Welcome to the Religious Marketplace!

Welcome to "The Religious Marketplace," a blog created for free and open exchange on how economic thinking can improve our understanding of religious behavior. Though this blog was created originally for students of Professor McBride's "An Economic Approach to Religion" (ECON 17) course at UC Irvine, any visitors are welcome to participate.

The intention is that this blog will be a place for students and others to explore an economic way of thinking about current topics and events in the realm of religion. Personal opinions, as distinguished from economic analysis, are also allowed in the flow of discussion, though the primary focus should remain the economics of the issues.

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