Do different religions lead to different economic behavior?

I came across this fascinating paper on the topic by economists Daniel Benjamin, James Choi, and Geoffrey Fisher. They evaluate whether different religions lead to different economic behavior.

They evaluate 6 hypotheses based on previous research on the subject. They use laboratory settings to test these hypotheses:

H1. Contributions to public goods are affected positively by Protestantism and negatively by Catholicism (Putnam, 1993; La Porta et al., 1997).

H2. Trust is affected positively by Protestantism and negatively by Catholicism, and trust is the mechanism explaining the relationship between religion and public goods contributions (Putnam, 1993; La Porta et al., 1997).

H3. Financial risk-taking is reduced by religion. Kumar, Page, and Spalt (2009) argue that risk-taking is reduced by Protestantism, whereas Hilary and Hui (2009) argue that risk taking is reduced by both Protestantism and Catholicism.

H4. Thrift and capital accumulation are promoted by religion (Weber, 1930; Guiso, Sapienza, and Zingales, 2003; Barro and McCleary, 2003, 2006).

H5. Generosity is increased by religion (Friedrichs, 1960; Batson, Schoenrade, and Ventis, 1993).

H6. Work ethic is increased by religion, and especially by Protestantism (Weber, 1930; Barro and McCleary, 2003, 2006).

 And their findings:

Consistent with H1, we find that Protestantism increases contributions to the laboratory public good, while Catholicism decreases contributions.

In partial support of H2, we find that Catholicism decreases expectations of others’ contributions to the public good, and Catholicism has no statistically significant effect on contributions once its impact on trust is controlled for. However, Protestantism does not affect trust, suggesting that Protestantism’s positive impact on public good contributions comes from a norm to unconditionally contribute to public goods.

 Our data do not support H3. In accordance with Kumar, Page, and Spalt (2009), we do find that religious identity norms cause Protestants to become relatively more risk averse than Catholics, but this is because Catholicism increases risk-taking, rather than Protestantism reducing risk-taking as Kumar, Page, and Spalt (2009) hypothesize.

We find no evidence for Judeo-Christian identity effects on discount rates and generosity(H4 and H5). Nor do we find Christian work ethic effects (H6). However, we do find a work ethic effect for Judaism; among Jews, priming religion increases the rate at which workers increase their effort in response to higher wages in the gift-exchange game.

What research economists keep doing.

Immediately, was thinking about the various religions in India. How do they impact Indian economy? Could we say religion as one of the factors for such diverse growth patterns in various states? I don’t know just wondering.

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6 Responses to “Do different religions lead to different economic behavior?”

  1. raj Says:

    Actually, this subject is over a century old. Max Weber had postulated in 1904 that “protestanism’ created a favourable mindset for capitalism, etc. See http://en.wikipedia.org/wiki/The_Protestant_Ethic_and_the_Spirit_of_Capitalism

  2. Do different religions lead to different economic behavior? « Mostly Economics « Rubber Tyres –> Smooth Rides Says:

    […] Do different religions lead to different economic behavior? « Mostly Economics Blogged with the Flock Browser ▶ No Responses /* 0) { jQuery('#comments').show('', change_location()); jQuery('#showcomments a .closed').css('display', 'none'); jQuery('#showcomments a .open').css('display', 'inline'); return true; } else { jQuery('#comments').hide(''); jQuery('#showcomments a .closed').css('display', 'inline'); jQuery('#showcomments a .open').css('display', 'none'); return false; } } jQuery('#showcomments a').click(function(){ if(jQuery('#comments').css('display') == 'none') { self.location.href = '#comments'; check_location(); } else { check_location('hide'); } }); function change_location() { self.location.href = '#comments'; } }); /* ]]> */ Click here to cancel reply. […]

  3. unicon india Says:

    Contributions to public goods are affected positively by Protestantism and negatively by Catholicism (Putnam, 1993; La Porta et al., 1997).

  4. select your broker Says:

    Thrift and capital accumulation are promoted by religion (Weber, 1930; Guiso, Sapienza, and Zingales, 2003; Barro and McCleary, 2003, 2006).

  5. select your broker Says:

    Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, “management of a household, administration”) from οἶκος (oikos, “house”) + νόμος (nomos, “custom” or “law”), hence “rules of the house(hold)”.Current economic models developed out of the broader field of political economy in the late 19th century, owing to a desire to use an empirical approach more akin to the physical sciences.

  6. unicon india Says:

    Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime, education, the family, health, law, politics, religion, social institutions, war, and science. The expanding domain of economics in the social sciences has been described as economic imperialism.

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